59 1/2 rule for Inheritance IRA

[Guest bluedevil]

My wife's uncle passed away and left her with three IRA's. She is 49, and will be 50 in January. I know we have three options: 1) take all the money now, 2) do a five year plan, or 3) do a stretch plan. My questions is, will she have to pay the 10% penalty for taking the money..

[BPickerCPA]

First of all, if the uncle was over 70½ when he died, you don't have the five year plan.

In any event, there is NO 10% penalty on an inherited IRA. You should opt for taking the minimum distribution based upon her life expectancy. You are NOT locked into taking only the minimum; you can TAKE MORE any time you want.

Be aware that banks/brokers do not always provide the correct advice.

[John G]

Barry, What are the rules governing combining the 3 inherited IRAs? Can you combine them into one of them, or into a fourth account set up for that purpose?

[BPickerCPA]

John,

Accounts inherited from the same decedent can be combined with each other, but not with any other accounts, whether your own, or inherited from a different decedent.