What’s the best way to maximize the benefits of an inherited IRA?
There is a concept called the “stretch IRA.” The idea is for the beneficiary to take only the minimum that is required by law each year to extend the viability of the account.
Clearly, this is a more effective strategy when it is used in conjunction with a Roth IRA since there are no taxes to pay on the distributions. Plus, you would never be required to take distributions while you are alive.
With the traditional variety, the MMDs that the original account holder would be compelled to accept would continually reduce the value of the IRA before it is transferred to the beneficiary.