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The biggest change we’ve seen in recent years is the outdated concept of the stretch IRA, where beneficiaries could withdraw funds based on their life expectancy.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

Most Asked Social Security Questions

It’s no question that Social Security plays a crucial role in retirement planning, helping to provide a stable income stream for millions of recipients. In this week’s Better Money Boston with WC…

Can I Get ‘Out’ of a Fixed-Rate Vehicle?

When you lock into a fixed-rate vehicle like a CD, fixed annuity, or fixed-indexed annuity, you’re committed to a specific interest rate for a set period. But what happens when after a few years, ra…

Podcast Episode 402: How Often Should You Meet with Your Financial Advisor?

A good relationship between a client and their financial advisor relies on clear communication and regular check-ins to ensure everything is on track. In this episode of the Money Wisdom podcast, Ja…

Think Like the Rich

As you enter retirement, your financial focus shifts from growing your wealth to preserving your assets and generating income. In this stage of life, adopting the mindset of the wealthy can go a lon…

Leaving a Lasting Legacy

Estate planning can be a difficult yet necessary conversation to have with your loved ones. Everything from the distribution of your assets to your wishes regarding end-of-life care is up for discus…

Right Time for Social Security

Contrary to popular belief, waiting to claim Social Security until age 70 to get the maximum benefit is not the best decision for everyone. So, when is the right time? In this week’s Retire Wiser…

What is the Social Security Fairness Act?

You may have heard about the Social Security Fairness Act, which was signed into law on January 5, 2025. But what is it and who does it help? In this week’s Money Wisdom Question Series, Ian Ferg…

Finding Your Way on Taxes

Taxes can be confusing on any given day, but in retirement, they require even more attention and understanding. In fact, taxes are at the core of nine out of every ten conversations we have with the…

How to Effectively Plan for Healthcare in Retirement

As you approach retirement, the reality of rising healthcare costs becomes clearer. When planning for this significant expense, it’s important to consider all aspects – from prescription drug costs…

Case Study: Steps to Determine How Much Money You Need

Imagine you’re 63 and ready to retire, with plans to live on $80,000 a year. The question is: how much should you have saved by that time? Nicholas J. Colantuono, CFP® joins Better Money Boston w…
    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