What happens to an inherited IRA depends on your relationship to the original account owner and the type of IRA you inherit. In many cases, you’ll need to follow specific IRS distribution rules that can affect your taxes and long-term retirement strategy. Because the timing of withdrawals can significantly affect your tax situation, it’s important to understand your options before withdrawing funds from the account. Coordinating an inherited IRA with your overall financial plan can help you make more informed decisions and avoid costly mistakes.