fbpx
Skip to main content
Created: October 11, 2024
Modified: October 8, 2024

Podcast Episode 378: What Should You Do with an Inherited IRA?

What You’ll Learn:
Most people are focused on their family when it comes to planning, and there are some primary issues that need to be addressed ahead of time.

The one constant in financial planning is change, especially when it comes to tax laws. The government is always adjusting tax laws and they’ve recently made some changes to the rules around retirement accounts. For people who have been saving for retirement, it’s important to know how these changes will affect you and your family.

In this episode of the Money Wisdom podcast, Jake Doser, CFP®, CPWA® and Nicholas J. Colantuono, CFP® tackle the intricate subject of inherited IRAs and the ever-evolving tax laws that accompany them. As tax regulations change, it’s crucial to stay informed and prepared to handle the financial implications that arise when inheriting retirement accounts.

The biggest change we’ve seen in recent years is the outdated concept of the stretch IRA, where beneficiaries could withdraw funds based on their life expectancy. Beneficiaries are now required to withdraw the entire amount within ten years, significantly impacting tax planning strategies. This shift emphasizes the importance of understanding the tax implications and devising a plan to minimize the burden.

At the core of the issue are taxes. The government’s requirement for minimum distributions from inherited IRAs is not about ensuring income but about securing tax revenue. That’s why these changes are happening and it highlights the need for proactive planning to mitigate the generational tax burden. As Nick aptly puts it, “Nobody should leave Uncle Sam a tip.”

That’s why we often have conversations about Roth conversions as a strategic move to manage taxes efficiently. By converting traditional IRAs to Roth IRAs during low-income years, individuals can pay taxes at a lower rate and ensure that their money grows tax-free in the future. This approach not only benefits the account holder but also provides a tax-efficient legacy for beneficiaries, which has become much more important with these tax changes.

All of this ties back into a cohesive financial plan that integrates tax planning, investment strategies, and estate considerations. Don’t treat retirement planning as an isolated task. Instead, take a comprehensive approach with a financial advisor.

Text the word OFFER to 807-570-0436 to get a copy of ‘Are You Paying Too Much in Taxes in Retirement?’ and start identifying solutions to the tax challenge in retirement.

Here’s some of what we discuss in this episode:

• The changes made to the stretch IRA will force you to pay taxes on that money much sooner.

• Why does Uncle Sam require a minimum distribution on inherited IRAs?

• How this changes the legacy planning portion of our conversation with clients?

Information presented in our podcasts is considered current as of the created date. Over time, some information presented may become stale. We recommend you consult with your Financial Professional before making any changes based on information contained here.

Johnson Brunetti is a marketing name for the businesses of JB Capital and JN Financial.

Investment Advisory Services offered through JB Capital, LLC. Insurance Products offered through JN Financial, LLC.
The guarantees provided by any type of insurance contract are based on the claims-paying ability of the insurance company.

Resources by Topic

Subscribe to Our YouTube Channel

Share

Related Resources

  • Identity Theft: What to Do If Your Identity Is Stolen

    In the digital age, the threat of identity theft is at an all-time high. Sophisticated cybercrime tactics and schemes have left us more vulnerable to online scams than ever before. So, what can…
  • The Road to Retirement – Don’t Go it Alone

    Achieving the retirement you’ve always dreamed of often requires careful planning. While the do-it-yourself approach may be difficult to shake, consider the benefits of seeking professional advice…
  • What Updates Can We Expect for Social Security in 2025?

    A new year means new rules for retirement plans. Let’s start with one of the largest sources of income for millions of retirees: Social Security. What changes can we expect in 2025? Heath Gross…
  • Getting It All Together for Retirement

    After a long, fulfilling career, the time has come to embrace the next chapter. You may have envisioned the age at which you’d retire since you began working, but it’s important to distinguish bet…
  • Key Questions for Planning Your Retirement Income

    Replacing your income in retirement is a significant undertaking that raises many important questions and requires careful planning. First and foremost, it’s essential to have a retirement income …
  • Health Care Expenses in Retirement

    Of all the expenses to expect in retirement, health care often makes up a significant portion of your costs. Monthly premiums, out-of-pocket expenses, and services not covered by Medicare can quic…
  • Income Planning 101

    You’ve spent the last few decades saving for retirement but are you truly prepared? To help address any concerns or uncertainties you may have, you need an income plan – one that considers every f…
  • Frequently Asked Social Security Questions

    Almost every American is impacted by Social Security in some way, so it’s no wonder that it’s one of the most frequently asked topics in retirement planning. When and how you start taking benefits…
  • Maximizing Your Social Security Income

    Social Security can serve as a safety net for many retirees, sometimes acting as a primary source of income. However, the program is highly complex with over 500 ways to claim benefits. Even one o…
  • How Much Money Can I Spend in Retirement?

    “How much can my spouse and I realistically spend in retirement at age 62 with $1 million saved?” Today’s hypothetical couple is asking the very question that most pre-retirees ponder when gearing…
    Back to top
    Our Locations
    Johnson Brunetti
    Welcome to Our New Website!
    Everything was designed with you in mind, making our retirement planning resources more easily accessible to you.
    Check out your new resource center, where everything can be organized by article type or topic
    Are you ready to speak with a financial advisor?
    Skip to content