How long do I have to withdraw from a Merrill Edge Inherited IRA?

Most non-spouse adult beneficiaries must empty the Merrill inherited IRA by December 31 of the 10th year after the original owner's death. If the original owner had already started required minimum distributions, you must also take annual RMDs in years 1–9 based on your own life expectancy, per IRS final regulations issued July 2024.

Does a Merrill Inherited IRA balance count toward Preferred Rewards?

Yes. Your Merrill inherited IRA balance counts toward your combined balance for Bank of America Preferred Rewards qualification, helping you reach or maintain Gold ($20,000), Platinum ($50,000), or Platinum Honors ($100,000) tiers. This provides credit card rewards bonuses and banking perks on top of the inherited IRA's tax-deferred growth.

Is there a 10% early withdrawal penalty on a Merrill Inherited IRA?

No. Inherited IRA distributions are exempt from the 10% early withdrawal penalty regardless of the beneficiary's age. Ordinary income tax applies to distributions from an inherited traditional IRA. Inherited Roth IRA distributions are generally tax-free if the original account met the 5-year holding rule.

Can a surviving spouse roll a Merrill Inherited IRA into their own account?

Yes. A surviving spouse can roll the Merrill inherited IRA directly into their own Merrill traditional or Roth IRA. Rolling to their own IRA resets the RMD clock to the surviving spouse's own age — generally the most tax-efficient option for surviving spouses under 73.

What happens if I don't empty the Merrill Inherited IRA within 10 years?

Failing to withdraw the required amount by the 10-year deadline results in a 25% excise tax on the remaining required distribution amount under SECURE 2.0. Previously this penalty was 50%. Working with Merrill's estate services team and a tax advisor can help you build a compliant drawdown schedule.

Merrill Edge Inherited IRA 2026 — 10-Year Rule, RMDs & How to Open

Inheriting a Merrill IRA brings both complexity and opportunity. Most adult non-spouse beneficiaries face the 10-year rule: the inherited IRA must be fully distributed by December 31 of the 10th year after the original owner’s death. For Bank of America customers, an inherited Merrill IRA also counts toward Preferred Rewards — a meaningful side benefit as the balance grows through its distribution window. Merrill provides estate services and planning support to help beneficiaries navigate the process.

The 10-Year Rule: The Core Rule for Most Beneficiaries

Under the SECURE Act (effective January 1, 2020), most non-spouse beneficiaries who inherit an IRA must withdraw all funds by December 31 of the 10th year following the year of the owner’s death. There are no required annual distributions during years 1–9 unless the decedent had already started required minimum distributions (RMDs).

If the original owner had NOT yet started RMDs (died before their Required Beginning Date):

Beneficiary can take distributions in any amount, at any time
Account must be fully distributed by December 31 of the 10th year after death
Strategy: spread withdrawals across years to manage tax brackets

If the original owner HAD started RMDs (died on or after their Required Beginning Date):

Beneficiary must take annual RMDs in years 1–9 based on the beneficiary’s own life expectancy
Account must be fully emptied by December 31 of the 10th year
This rule was confirmed by IRS final regulations issued in July 2024

The Required Beginning Date is April 1 following the year the original owner turns age 73 (if born 1951–1959) or age 75 (if born 1960 or later) under SECURE 2.0.

Who Can Still Use the Stretch IRA (Eligible Designated Beneficiaries)

Five categories of beneficiaries — called Eligible Designated Beneficiaries (EDBs) — are exempt from the 10-year rule and may instead take distributions over their own life expectancy:

Eligible Designated Beneficiary	Distribution Rule
Surviving spouse	Life expectancy or roll to own IRA
Minor child of the decedent	Life expectancy until majority, then 10-year rule
Disabled individual (IRS definition)	Life expectancy
Chronically ill individual	Life expectancy
Person not more than 10 years younger than decedent	Life expectancy

All other beneficiaries — adult children, siblings, nieces, nephews, friends — must use the 10-year rule.

Surviving Spouse: Three Options

A surviving spouse has the most flexibility of any beneficiary:

Roll to their own IRA — Treat the inherited IRA as their own; their own RMD rules apply; they can also make new contributions if eligible. Best if the surviving spouse is younger than the deceased.
Open an inherited IRA — Keep the account as an inherited IRA; use the deceased’s or their own life expectancy to calculate RMDs. Useful if the surviving spouse is under 59½ and needs penalty-free access.
Life expectancy distributions — Take distributions based on the surviving spouse’s single life expectancy each year.

No 10% Early Withdrawal Penalty

One key benefit of an inherited IRA: there is no 10% early withdrawal penalty, regardless of your age. This applies to both inherited traditional IRAs and inherited Roth IRAs. You will still owe ordinary income tax on distributions from an inherited traditional IRA.

Inherited Roth IRA Rules

The 10-year rule applies to inherited Roth IRAs the same as traditional IRAs — the account must be emptied by the end of the 10th year. However:

Distributions are generally tax-free if the original Roth IRA was held for at least 5 years
No annual RMDs required during the 10-year period, even if the decedent was past their RBD (because Roth IRAs have no RMDs for the original owner)
Strategy: let the Roth account grow tax-free for all 10 years, then take a lump sum in year 10

Inherited IRA Rules: What You Cannot Do

No contributions — You cannot add money to an inherited IRA
No rollover to your own IRA — Non-spouse beneficiaries cannot roll an inherited IRA into their own IRA (doing so creates a taxable distribution)
No conversion to Roth — Non-spouse beneficiaries cannot convert an inherited traditional IRA to a Roth (only surviving spouses who roll to their own IRA can do this)
Do not combine inherited IRAs from different decedents — keep each inherited IRA separate by decedent

How to Open a Merrill Inherited IRA

Contact Merrill — Visit merrilledge.com or call Merrill’s estate services team to initiate a beneficiary claim. Merrill Edge and Merrill Lynch both process inherited IRA transfers.
Submit documentation — Provide the decedent’s death certificate, your government-issued ID, and the original IRA account number.
Establish the inherited IRA — Merrill opens a new account with the correct beneficiary titling: “[Decedent Name], Deceased [Date], IRA FBO [Your Name].”
Transfer assets in-kind — Existing investments move from the decedent’s account to the inherited IRA without liquidation, preserving your positions.
Plan distributions — Use Merrill’s financial tools and consider consulting a tax advisor to build a 10-year drawdown strategy that minimizes your tax burden.

Preferred Rewards and the Inherited IRA

For existing Bank of America customers, one of Merrill’s distinctive benefits is that the inherited IRA balance counts toward Preferred Rewards tier qualification:

Tier	Balance Threshold	Credit Card Bonus
Gold	$20,000 combined	25% rewards bonus
Platinum	$50,000 combined	50% rewards bonus
Platinum Honors	$100,000 combined	75% rewards bonus

An inherited IRA balance rolling toward its 10-year distribution window can temporarily boost your combined balance to a higher tier, delivering real cash value through elevated credit card rewards and banking perks.

Inherited IRA Titling at Merrill

Merrill requires the inherited account to be titled correctly:

[Decedent Name], Deceased [Date], IRA FBO [Beneficiary Name]

Never transfer the account to your own name — that action triggers immediate taxation of the full balance.

Distribution Planning Strategies

If the decedent had NOT started RMDs: No mandatory annual withdrawals in years 1–9. Take distributions strategically in years when your income is lower to minimize tax bracket impact. Full clearance required by year 10.

If the decedent HAD started RMDs: Annual RMDs required in years 1–9 based on your IRS Single Life Expectancy. Add voluntary withdrawals in lower-income years. Zero balance required by December 31 of year 10.

Inherited Roth IRA at Merrill: No distributions required in years 1–9. Take the full balance in year 10 — tax-free, assuming the original Roth met its 5-year rule. This maximizes tax-free compounding within the 10-year window.

Written by WealthVieu

WealthVieu researches and writes data-driven personal finance guides using primary sources including the IRS, Bureau of Labor Statistics, Federal Reserve, and Census Bureau.

The content on Wealthvieu is for informational purposes only and should not be considered financial, tax, or investment advice. Consult a qualified professional before making financial decisions. Full disclaimer · Editorial policy