DInherited Individual Retirement Accounts (IRAs) are a valuable financial legacy, but their rules can be a maze for heirs. In 2025, Denise Appleby, a leading retirement planning expert, has been in the spotlight for her clear guidance on navigating these complexities. As CEO of Appleby Retirement Consulting in Grayson, Georgia, her insights, featured in outlets like CNBC, are helping heirs manage required minimum distributions (RMDs), avoid tax penalties, and maximize their inheritance.
Who Is Denise Appleby?
Denise Appleby is a trusted name in retirement planning. She leads Appleby Retirement Consulting, where she specializes in IRA and employer-sponsored plan regulations. Her ability to simplify complex tax laws has made her a go-to resource for financial advisors and everyday investors. In 2025, denise appleby news expertise on inherited IRA rules has gained attention, with her advice appearing in major publications like CNBC and Morningstar. Her focus is on helping heirs avoid costly mistakes, making her a vital voice in today’s evolving retirement landscape.
What Are Inherited IRAs?
An inherited IRA is a retirement account passed to a beneficiary after the original owner’s death. These accounts, also called beneficiary IRAs, can come from Traditional or Roth IRAs or 401(k) plans. Heirs cannot add funds to these accounts, but the money can grow with tax advantages for a set period. The rules depend on the heir’s relationship to the deceased and the type of IRA. Recent laws, like the SECURE Act of 2019 and SECURE 2.0 Act of 2022, have added layers of complexity, creating challenges for heirs.
The 2025 Inherited IRA Rule Changes
The 10-Year Rule Explained
Starting January 1, 2025, the IRS has enforced the 10-year rule for most non-spouse heirs. This rule requires heirs to fully withdraw all funds from an inherited IRA by December 31 of the 10th year after the original owner’s death. It applies to both Traditional and Roth IRAs. The rule aims to ensure retirement accounts are taxed within a reasonable timeframe, but it has confused many heirs who expected more flexibility.
Annual RMD Requirements
If the original owner was taking RMDs (typically age 73 or older) before their death, heirs must take annual RMDs during the 10-year period. This applies to Traditional IRAs and adds another layer of compliance. For Roth IRAs, annual RMDs are not required, but the account must still be emptied by the 10th year. Missing these RMDs can lead to significant penalties, a point Appleby frequently emphasizes.
Penalties for Non-Compliance
Failing to take an RMD in 2025 triggers a 25% excise tax on the amount that should have been withdrawn. If corrected within two years, the penalty drops to 10%. With the average IRA balance at $127,534 in Q4 2024 (Fidelity data), these penalties can be substantial. The IRS waived penalties for missed RMDs from 2020 to 2024, but that relief ends in 2025, making compliance critical.
Denise Appleby’s Key Insights
Confusion Around RMDs
Appleby has highlighted the widespread confusion among heirs about RMD requirements. Many assume they can delay withdrawals until the 10th year, unaware of the annual RMD obligation for certain accounts. This misunderstanding can lead to unexpected tax bills. Appleby’s media appearances, including a March 2025 CNBC feature, stress the need for education to prevent these errors.
The Cost of Tax Penalties
The 25% penalty for missed RMDs is a major concern, especially for larger accounts. Appleby warns that without proper planning, heirs could lose a significant portion of their inheritance. She notes that the IRS is stricter in 2025, as penalty waivers are no longer automatic. Her advice focuses on proactive steps to avoid these costly mistakes.
Smart Withdrawal Planning
Appleby advocates for strategic withdrawal planning to minimize taxes. Instead of taking a lump sum in the 10th year, heirs should spread distributions over the 10-year period. This approach helps manage tax brackets, especially for Traditional IRAs, where withdrawals are taxed as ordinary income. For Roth IRAs, she suggests delaying withdrawals to maximize tax-free growth.
How to Avoid Penalties
Correcting RMD Mistakes
If an RMD is missed, Appleby advises withdrawing the required amount immediately. Heirs should then file IRS Form 5329 to report the error and request a penalty waiver. Including a letter explaining the mistake, such as confusion over the rules, often leads to relief. Appleby’s clients have successfully used this method to avoid penalties.
Consulting a Professional
Working with a financial advisor or tax professional is crucial. They can calculate RMDs, plan distributions, and ensure compliance with IRS rules. Appleby emphasizes the value of fiduciary advisors who prioritize the heir’s interests. This guidance is especially important for larger accounts or complex tax situations.
Staying Organized
Heirs should track their inherited IRA closely. Setting calendar reminders for RMD deadlines can prevent oversights. Appleby suggests reviewing account statements regularly to confirm withdrawals are on track. This simple habit can save thousands in penalties.
Leveraging Roth IRA Advantages
For inherited Roth IRAs, heirs have more flexibility. Since annual RMDs aren’t required, delaying withdrawals until the 10th year can maximize tax-free growth. Appleby notes that this strategy is ideal for younger heirs who expect to be in higher tax brackets later.
Filing Form 5329
Form 5329 is essential for reporting RMD errors. Appleby explains that heirs should complete Part IX to document the missed RMD and calculate the penalty. A separate letter should explain the error, such as a misunderstanding of the 10-year rule. Filing this form with a tax return, or separately if no return is due, is straightforward. Appleby’s guidance has helped many heirs secure penalty waivers through this process.
Appleby’s Media Presence
enise appleby news expertise has been widely covered in 2025. A CNBC article in March 2025 quoted her on the 25% penalty risk and RMD confusion. NBC News featured her advice on avoiding common inherited IRA mistakes. Morningstar and Bankrate also published her insights on RMD strategies and Form 5329 filing. Her media presence highlights the urgency of understanding the 2025 changes.
Why These Rules Matter
Inherited IRAs are a significant asset for millions of Americans. With the average IRA balance at $127,534, errors can lead to substantial losses. The end of penalty waivers in 2025 increases the stakes. Denise appleby news guidance helps heirs preserve wealth, reduce taxes, and avoid IRS penalties. Proper planning ensures the inheritance serves its intended purpose.
Planning for the Future
Heirs should start planning early. Reviewing the inherited IRA’s terms, consulting a professional, and setting a withdrawal schedule are key steps. Appleby encourages heirs to treat the account as a long-term financial tool, not a quick windfall. This mindset maximizes its value.
Conclusion
Denise appleby news 2025 insights are a beacon for heirs navigating inherited IRAs. Her clear advice on the 10-year rule, RMDs, and penalty avoidance empowers individuals to protect their financial legacy. By correcting errors, consulting experts, and planning withdrawals, heirs can comply with IRS rules and minimize taxes. Appleby’s media contributions underscore the importance of staying informed. Take action now to secure your inherited IRA and ensure it supports your financial goals.
FAQs
What is the 10-year rule for inherited IRAs?
Non-spouse heirs must withdraw all funds from an inherited IRA by the end of the 10th year after the owner’s death.
Are RMDs required for inherited Roth IRAs?
No, annual RMDs are not required, but the account must be emptied by the 10th year.
What is the penalty for missing an RMD in 2025?
A 25% tax applies to the missed amount, reduced to 10% if corrected within two years.
How do I avoid inherited IRA penalties?
Take RMDs on time, correct errors quickly, and file Form 5329 to request a waiver.
