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Don't Make a Mistake with your Inherited IRA

Don't Make a Mistake with your Inherited IRA

| March 21, 2022

Jason Stone: Hi everybody, it's Jason Stone with the Secura Minute. Today, I wanted to take a little bit of time, to talk about the inherited IRA rules that were passed under the SECURA Act from 2019.

So, starting January 1st, 2020, anybody that inherits money as a non-spouse beneficiary, is required to take their money out over a 10-year time frame, instead of being able to use the stretch IRA, which was the rules historically. So, what does that mean? 

Well, it’s really important that if I'm inheriting money from my parents, that if the money is in a retirement account, I'm keeping it in the right structure. If I incorrectly took a $300,000 distribution and pulled all that money out in one lump sum, I'm probably looking at, between federal and state taxes in California, losing somewhere between forty and fifty percent of that money, all in one shot. So, a $300,000 check, almost immediately turns into about a $165,000 check, after that federal and state tax bill.

So, understanding how and when I'm taking out money, making sure that I'm taking out distributions in the right sequential order, and focusing on how I can impact or save on taxes becomes crucially important when I'm managing what I want to do with that money. It also means that I have the ability to still keep that money invested for the better part of a decade, and if I'm planning correctly, hopefully, I'm taking out significantly more than that original amount that I put in. 

So, if you're about to inherit some money, or you’ve inherited some money, and you're worried about making mistakes, Secura can help you plan and look at different ways to maximize those dollars and honor the legacy of your loved ones. So, please feel free to reach out to us in the link below, we're happy to answer any questions and tell you how you can maximize that dollar, that you received in that inherited IRA. 

Thanks so much and I look forward to hearing from you, talk soon.