Proposed new regulations from the Internal Revenue Service for inherited retirement accounts would require many heirs to make minimum annual withdrawals from the accounts—leaving less room for the savings to grow tax-deferred over the years.
The new rules would provide guidance to the Secure Act of 2019, which made several changes to laws governing retirement accounts.
For traditional individual retirement accounts, the proposed rules—which would apply to accounts inherited after 2019—would affect heirs known as designated beneficiaries. That category includes most beneficiaries other than spouses, such as children over 21 years old and grandchildren.
The new rules wouldn’t apply to beneficiaries of Roth IRAs. But they would affect those who inherit workplace retirement plans such as 401(k)s, 403(b)s and eligible…
