Inherited IRAs at Fidelity
Fidelity Investments offers a variety of IRA types, including the Inherited IRA. Along with the account, Fidelity provides great pricing and a wide range of retirement resources. Here’s the complete overview:
Overview of Fidelity’s Inherited IRA
Fidelity offers an Inherited IRA in both Roth and Traditional tax structures. It can be used to inherit assets from a regular IRA or a workplace retirement account, such as a 403b, 457, or 401k.
An Inherited IRA can be set up as either a self-directed (brokerage) or investment-advisory (managed) account. The managed option is a good choice for Inherited IRA clients who need extra guidance. Inherited IRAs can be more complex than standard IRAs due to tax and inheritance laws.
Inherited IRAs for Spouses
Both spouses and non-spousal beneficiaries can open an Inherited IRA. Spouses have the option of rolling over inherited assets into an existing IRA instead of opening an Inherited IRA. Fidelity offers many other types of IRAs, including Roth, Traditional, SEP, SIMPLE, and Rollover accounts.
Required Minimum Distributions from an Inherited IRA
Any type of IRA at Fidelity can be set up to take RMDs (Required Minimum Distributions) if necessary. RMDs are not required in every situation, but they are in many. It’s important to consult with a qualified tax professional before making any withdrawals from an IRA.
Inherited IRA Resources
Fidelity offers a wealth of retirement resources that Inherited IRA owners might find useful. For instance, Fidelity has a department called Transition Services that assists customers with account conversions and transfer issues. You can reach them at 800-544-0003.
Fidelity also provides extensive educational materials on its website covering IRAs, retirement, inheritance, and related topics. Some of the resources include:
- Managing estate planning
- Dementia and Alzheimer’s: signs and symptoms
- Claiming life insurance benefits
- Retirement Income Calculator
- Executor & Trustee Guidelines
Fidelity has an online notification tool to report the death of a Fidelity client. They also offer a helpful checklist of steps to take when a loved one passes away.
Available Investments
An Inherited IRA at Fidelity has access to the same range of tradable assets as other retirement accounts. These include:
- Stocks
- Options
- Bonds and other fixed-income securities
- Funds (mutual, exchange-traded, and closed-end)
While Fidelity does offer trading in bitcoin and Ethereum, these cannot be traded in an IRA.
Fees and Minimums
Fidelity’s Inherited IRA follows the same pricing schedule as other IRAs. There are no closeout, maintenance, annual, or inactivity fees. An Inherited IRA can be opened with no deposit.
Once opened, an Inherited IRA benefits from Fidelity’s excellent commission schedule, which includes free trades on many assets, such as U.S.-listed stocks and ETFs. Many mutual funds are also commission-free.
There is no fee to transfer an Inherited IRA into or out of Fidelity.
Opening an Inherited IRA at Fidelity
Thanks to Fidelity’s user-friendly website, opening an Inherited IRA is easy. Look for the link at the top of the site to open an account. Clicking this link will bring up a page with the most popular account types. Scroll down until you find the tile for the Inherited IRA.
In the tile, there’s a button to open an Inherited IRA. Clicking this link will lead you to the application for the Traditional version. Click on the ‘Inherited IRA’ link to go to an informational page with an orange button to open an account. After clicking this button, you’ll see a pop-up window to choose between Roth and Traditional versions of the Inherited IRA.
You may need a copy of the decedent’s death certificate during the account application.
Schwab as a Substitute
If you prefer to use Schwab for an Inherited IRA, you’re in luck. Schwab offers the Inherited IRA along with a wide range of retirement resources.
To open an Inherited IRA with Schwab, simply click the orange-brown button at the top of their website to open an account. Click the link to show all accounts (the Inherited IRA won’t show up initially). Find the tile for the Inherited account, click on it, and choose the application for a regular or minor beneficiary (Schwab has two applications). The application for a minor beneficiary is for individuals under 18. A digital copy of the death certificate will be required.
It’s also possible to open an Inherited IRA on Schwab’s mobile app.
Free Charles Schwab Account
Open Schwab Account
Updated on 7/19/2024.
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