Everything You Need to Know About RMDs Part 3: How to Handle an Inherited IRA or Retirement Account

This is Part 3 in our three-part series about Required Minimum Distributions. If you missed the previous two, click here to listen to Part 1 and click here to listen to Part 2, where we discussed the basics of RMDs and big-picture strategies to help you reduce them.

Now, we’re going to help you answer a huge (and tricky) question: What should you do when you inherit a retirement account? Whether it’s a 401(k), an IRA, a Roth IRA, a SEP IRA, Simple, TSP, 457, a 403(b), or something else, there’s a lot to know.

This is especially true because when it comes to inherited retirement accounts, the IRS is NOT known for being forgiving. They will show you no leniency if you (or your advisor) screw up, and you may lose tens - or hundreds - of thousands of dollars as a consequence.

That’s why today, we’re going to teach you what you need to know about inheriting qualified retirement accounts - and the many options you and your advisor have to help you save, grow, and reinvest your money.

In this podcast you’ll learn:

  • The very first thing you should do if you inherit a retirement account - and what you absolutely should NOT do.
  • Why there is zero room for mistakes when it comes to inheriting IRAs.
  • What you need to make sure of before you consider rolling your spouse’s retirement account into your own IRA - and a penalty you may not be aware of if you’re under the age of 59 ½.
  • A way to avoid tax liability in the year you inherit a non-spouse’s IRA - and how to grow it like a regular 401(k) or IRA.
  • Why you need to double-check how your own inherited IRA is titled.
  • The reason you and your financial advisor need to do a checkup on your IRA and 401(k) beneficiaries - and why you lose so many options when you do not name an individual beneficiary.

These materials and links are provided strictly as a courtesy. We make no representations as to the completeness or accuracy of information provided at these websites. When you access one of these websites, you are leaving our website and assume total responsibility and risk for your use of the website to which you are linking. The information is not intended to provide you with any personalized financial, insurance, legal, accounting, tax, or other professional advice.

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