Chartered Retirement Planning Counselor (CRPC) Practice Exam 2025 - Free CRPC Practice Questions and Study Guide

Heather's best distribution option regarding her deceased husband Ted's IRA, given that she does not need immediate income, is to roll the funds into a new IRA in her name. This option allows her to maintain the tax-deferred status of the funds, meaning she won’t have to pay taxes on the earnings until she withdraws them later.

By rolling over the existing IRA into her own IRA, she can also benefit from the investment options available within her new account, allowing for potential growth without the pressure of immediate withdrawals. Additionally, there are no required minimum distributions (RMDs) if she is not yet 73 years old, which provides flexibility in terms of when and how she withdraws funds in the future.

While other choices exist, withdrawing all funds immediately would trigger taxable income, and keeping the funds in the existing IRA indefinitely might limit her control over the investments. Converting the IRA into a Roth IRA, while it does provide tax-free distributions in the future, would also require her to pay taxes on the converted amount now, which may not be desirable since Heather does not need immediate income. Thus, rolling the funds into a new IRA in her name optimally aligns with her current financial situation and future planning.