Inherited IRAs- Beneficiary Tax Options

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Many of you are have inherited IRAs or are planning to pass on your IRAs to family. The Secure Act changed how this money can be distributed. Hans explains the important changes to how this money can be distributed, who can receive it, and how to pay less taxes. IRAs are an essential part of retirement planning, for both you and your Beneficiaries.
Questions? Email us at Hans@CardinalGuide.com, call us at (919) 535-8261, or visit our website at CardinalGuide.com.
Investment advisory services offered through Brookstone Capital Management, LLC (BCM), a registered investment advisor. BCM and Cardinal Advisors are independent of each other. Insurance products and services are not offered through BCM but are offered and sold through individually licensed and appointed agents. The content of this channel is provided for informational purposes only and is not a solicitation or recommendation of any investment strategy. Investments and/or investment strategies involve risk including the possible loss of principal. There is no assurance that any investment strategy will achieve its objectives. Index or fixed annuities are not designed for short term investments and may be subject to caps, restrictions, fees and surrender charges as described in the annuity contract. Any comments regarding safe and secure investments, and guaranteed income streams refer only to fixed insurance products. They do not refer, in any way to securities or investment advisory products. Fixed Insurance and Annuity product guarantees are subject to the claims‐paying ability of the issuing company and are not offered by Brookstone Capital Management. Information provided is not intended as tax or legal advice, and should not be relied on as such. You are encouraged to seek tax or legal advice from an independent professional. Cardinal Advisors is not affiliated with or endorsed by the Social Security Administration or any other government agency. Any review of “The Complete Cardinal Guide” is specific to the book and is not an endorsement of the advisor.

Опубликовано:

29 сен 2024

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Комментарии : 58

@videonewsletter Год назад

Great video! Thanks, John! Say, may I ask what are YOUR thoughts on my situation? :) A beloved friend (not spouse) who died in 2002 at the age of 63, had me as her beneficiary for her Pension Plan (not an IRA or 401k). Those funds (45K) were just sitting there, unbeknownst to me, untouched, and growing since 2002. So, having discovered its existence, the full amount was just now rolled over (untaxed) into an newly opened "Inherited IRA" (not Roth or Trad). She would have been 83 years old right now, and I just turned 59 (just as my wife). SO, what are the RULES/OPTIONS on withdrawing money from this "Inherited IRA" funded with retirement money from a death in 2002? I sort of understand that in this specific case, THE OLD RULES APPLY, and not the new Secure Act law, BUT WHAT are those OLD RULES in this specific case, and what TAX IMPLICATIONS/STRATEGIES apply here? My wife and I make about 30k filing jointly in SC.

@jimf710 2 года назад

I have always viewed traditional IRAs and (non-Roth) 401K accounts as the same. I know the beneficiaries of traditional IRAs have some choices as to when they get money/create taxable income, but what about beneficiaries of a traditional 401K? Does the account get liquidated immediately upon the account owner's passing (huge taxable event)?

@elli003 Год назад

Are you taxed on distributions AND as Income ?

@sfpelkey Год назад

OH YEAH!... Sam gonna get his piece

@tego73 Год назад

Is there a grace period for non-EDB's for 2022 before distributions need to be taken? I understand that I can skip taking my 10-year Inherited distribution for 2021 and 2022, but must start for 2023.

@markdemay2177 2 года назад

Always learning from your talks, thankyou.

@skittles2055 Год назад

Just over 5 minutes into this video and I gotta say to myself “I like this dude” and Subscribe! Thank you. Glad to have found this channel and will be checking out more of your content.

@meme-fd3fs 13 дней назад

Dear God my brain 😭

@raleedy 8 месяцев назад

I thought Jonathan Winters had died.

@shivysg Год назад

Hello Mr Hans! Great info and I believe , there is a mistake or needed to be explained properly. as you said or written on your board that Children under age 21 are eligible for EDB, which is half correct, as here's the IRS statement , "section 401(a)(9)(E)(iii) provides that when a minor child reaches the age of majority, that child will no longer be considered an eligible designated beneficiary and the remainder of that child’s portion of the employee’s interest in the plan must be distributed within 10 years of that date. " And I think this is the most crucial part, as no parents want their kids to inherit large sums of money at a very young age and pay huge taxes. I apologize if I came across as a fault finder or so, just wanted to make sure the right or full info is out, so people can make correct decisions. I am sure, I am no match to your understanding and experience. Regards Shivinder Gill

@CardinalAdvisors Год назад

Thanks for the clarification. I hope people are not making financial planning decisions based on my videos. Lots of the material on the board is abbreviated and simplified. Reach out to a competent advisor before making decisions

@bmp713 5 месяцев назад

When inheriting a Roth IRA you have to transfer the original Roth IRA funds into a custodian beneficiary Roth IRA account, but its not clear if the beneficiary's account or the original owner's account needs to have existed for 5 years for earnings to be tax free. Does the original owner or the beneficiary need to have held ownership of the Roth IRA funds for over 5 years for the distributed earnings to be tax free?

@CardinalAdvisors 5 месяцев назад

The 5 year rule does not apply after the owner dies.

@davideberhart9523 2 года назад

Another great lesson John. Thank you.

@8-Tryzub-8 9 месяцев назад

OK, so a NEDB has to withdraw in years 1 - 9 if the decedent has already started taking RMD's. What if the decedent was say 70 years old and has not started taking RMD's?

@CardinalAdvisors 9 месяцев назад

Then no RMDs years 1 - 9 and the account must be emptied by the end of year 10. Year one starts Jan 1 the year after death

@jonathanrosenesq202 2 года назад

Thanks Hans, great info and appreciate you citing your source from Ed Slott the expert.

@DDprzybyl 2 года назад

We called John when my wife inherited an IRA and other assets. So glad we did!

@jagger212121 Год назад

It was a really helpful video. Thank you very much.

@markr1256 2 года назад

Are similar rules in place for 401K accounts? Is the RMD in years 1-9 based on the decedent's age or the inheritors?

@Satjr35031 2 года назад

Age has nothing to do with it You could be 25 or 65 you have to draw down in 10years Unless the certain exemptions in video

@drbassface 8 месяцев назад

I’m already taking RMD’s as a non spousal Ira beneficiary but I’m 67. Been taking these since 2004. Would my daughter, if I die prior to age 72…will she need to take those RMD’s year 1-9?

@johnstouchpad6437 11 дней назад

Yes

@byron2521 6 месяцев назад

Thanks that clears some of this up. I am still in the EDB group, so I guess I'm still under lifetime distribution.

@colinhiggins4779 Год назад

Question: if you neex to take a RMD on an inherited IRA, and you do estimated taxes on a 1099, should you do witholding in the distribution, or pay the taxes owed quarterly?

@chang140000 Год назад

Great stuff! I have a question. My father passed away, and mistaken named me as beneficiary, but we really want this money to go to my mom. This was their nest egg, and it will be my mom's only income outside of social security. If I take the money, I will pay much more taxes than if my mom takes the money. Can we still get the IRA to my mom so she can distribute it over 10 years?

@ricric8348 2 года назад

Thanks...how can SS reduce my payment by 30% because I have a teacher's retirement?? They say Windfall....I earned that SS money..

@xmrblahhx Год назад

40% taxes sounds really high for most people. Where are you getting that number from?

@CardinalAdvisors Год назад

The state and federal tax brackets combined. When a beneficiary needs the money they just inherited, and many do, they cash it in all in one year and it sends them into higher/highest tax brackets.

@mcy2phil Год назад

I thought the IRS still allows for the inherited IRA the 10 year method and the life expectancy methods. I just looked it up the other day. I wish you had done a video on the assumed IRA vs. the inherited IRA.

@CardinalAdvisors Год назад

The spouse can still use life expectancy and certain designated beneficiaries. All other beneficiaries fall under the 10 year rule. I have not heard of an “assumed IRA”

@mcy2phil Год назад

Assumed IRA is when the spouse rolls over the IRA into their IRA after death of the spouse. I'm very surprised you never heard of it. When you assume a spouse's IRA it goes into your IRA. Between 59 1/2 and 73 If you assume the IRA, you can take penalty-free distributions anytime, or choose to wait until you’re age 73* when you have to take RMDs. If you inherit the IRA, there will be no penalties for distributions. But you may have to take RMDs every year (if you choose the life-expectancy distribution method instead of the ten-year method).

@Tjay-ur3qp Год назад

Good video. A couple of questions: 1) My mother passed away at 86 in March 2022 and I inherited her IRA. As she was already taking RMDs, I had to make a RMD payment in 2022 the year of her death and based on her balance on December 2021. I missed that 2022 RMD payment but subsequently made the payment just this past February 2023. I understand with all the final delayed IRS decisions, that any penalties for not taking a RMD in 2022 are being waived. Is that the case? 2) With now mandated RMD’s within the 10 year rule, is the RMD now revert from my Mother to MY lifetime calculation and where is the new calculation available? Thank you

@CardinalAdvisors Год назад

I am sorry about the passing of your mother. What you say sounds correct. I don’t want to ratify it in a comment. Our website has the uniform table. CardinalGuide.com

@latoyam.8944 Год назад

I have inherit ira and began taking rmd b4 2020. I opened a roth ira in dec 2022 and want to do conversion to my roth ira. I was told i need to open traditional b4 i can do so. Help!

@CardinalAdvisors Год назад

No conversions from inherited to Roth. You can contribute $6500/yr to a Roth and use the after tax RMD each year. I’ll be glad to help you. Hans 919-535-8261

@gregmori5161 Год назад

If the parent died at age 71 (before RMD’s) I assume the standard 10year rule applies. (No RMD required)

@CardinalAdvisors Год назад

Correct. 10 year rule with no RMDs

@SonyaSunny Год назад

Can I roll an Inherited Roth IRA somewhere? Or do I have to pull it out by year 10? I’m not related to the person that gave it to me.

@CardinalAdvisors Год назад

Sonya. You can roll it to new Roth IRA titled the same way. It will need to be emptied by year 10. We could set it up in a new inherited Roth IRA that would send you a check every month emptying it by year 10. Hans 919-535-8261

@kathymiller4447 2 года назад

How much can I convert to a Roth account each year? I'm 56yrs old and am considering doing this.

@CardinalAdvisors 2 года назад

Roth conversions are only limited by the amount you have in an IRA. Because you are under 59 1/2, you’ll need to pay the tax from other money.

@craigfugit997 Год назад

Do the same RMD rules apply to an inherited ROTH Account for non-spouse beneficiaries?

@CardinalAdvisors Год назад

Similar rules for Roth. No tax is due. No RMDs during the 10 years. The account must be emptied by the end of the 10th year.

@davidsweeney8663 Год назад

@@CardinalAdvisors Are RMDs required for non-spouse beneficiaries for an inherited Roth IRA when the parent died before 2020 - so pre-Secure Act?

@CardinalAdvisors Год назад

@@davidsweeney8663 Yes. Required Spread the RMDs over your lifetime. No tax on the distribution though

@Lili-xq9sn Год назад

Can inherited 401Ks and IRAs go into a 1st-Party Special Needs Trust??

@CardinalAdvisors Год назад

No IRA can be transferred to a trust without losing tax status

@Lili-xq9sn Год назад

@@CardinalAdvisors sorry, I don't understand. I have no choice but to put inherited IRAs 401Ks into my 1st-party Special Needs Trust. But is it possible to do? How do we do it?

@CardinalAdvisors Год назад

@@Lili-xq9sn I suggest liquidating the IRA over the next several/few years, paying taxes year by year, and putting the after tax money into the special needs trust. Hans hans@cardinalguide.com 919-535-8261

@gabersk Год назад

Thank you!

@crewcrewdin6891 Год назад

Thank you

@generatorjohn4537 2 года назад

The topic discussed, EDB. You just taught me something new here. With all these changes made on Inherited IRAs, definitely need to discuss this with a financial planner. Great video. Thanks 😊

@jamesblazen3023 2 года назад

You need a CPA or tax attorney.

@bonanzatime Год назад

So what's the deal?! Are RMDs 'required' on 'Beneficiary IRAs' this tax year (2023) or not?. When is the IRPest gonna make up their mind?!... all this 'Ambiguity! doesn't sound 'Secure' to me!😠

@CardinalAdvisors Год назад

Yes. Beneficiary or inherited IRAs have RMDs in 2023 for deaths of the IRA owner from 2022 and before.

@bonanzatime Год назад

@@CardinalAdvisors Where is that officially written? I'd like to see it, because everybody else (financial 'experts') says it hasn't been 'officially' determined.? Yet