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Josh, what about using an inherited IRA almost like a cash equivalent account to live off of while performing Roth conversions? If it's a Traditional IRA you will pay some taxes, but maybe it's just enough to take from to add to cash accounts, thereby allowing for additional Roth conversions.
Thanks, Josh but now with sniffy Joe & Dems. I was thinking why do Roth conversions in 12 % next year when wife retires? This Roth is legacy money right ? Now with the "Secure Act" dying with zero makes more sense? We will start gifting to our kids & Grandkids now when they're young enough to appreciate it not on your death bed when your kids will be in their 50's or 60's.
Of course the nice thing about inherited IRAs is that I don't actually have to deal with it my heirs do. As I told a guy trying to sell me some fancy product 1 time if people are lucky enough to get money for me they can be lucky enough to pay the taxes on it.
Save them the headache and just spend it.
It was my understanding that the 10 year rule did not require annual RMD's, only that the entire balance had to be withdrawn within 10 years. If that is the case, the easy way around is to simply take it all out in 1 year in a strategic manner. There are any number of ways I can think of where this could be extremely advantageous.
Might want to take it all out and take the hit for one year and back on O care the next.
Would Roth IRA's be handled the same way?
Overweight the bond % in your inherited IRA so you can estimate 3 years out. Your non inh ira allocation should be overweight stocks as you’re pushing back using it for 10 years. There’s a solution to every problem
Can you put REIT in a Roth IRA and not worry about taxes when you receives dividends?
It sucks, I’m not sure if it’s worth a one or two year withdrawal rate and get back to ACA subsidies.
You’d have to look at the tax impact, but maybe cheaper in the long run.
I’m in this boat, but will hit MC two years before the ten years. Lots of figuring in the next couple years. Maybe we will have a 30% correction!
Not sure why you're only showing an example with EVEN distributions over the ten year period? The rule simple requires that the balance be exhausted by the end of ten years. This means you can take ZERO for nine years and all of it in the tenth year, or vice versa, or any combination in-between.
Now, if someone's concern was Obama care or any type of Medicaid or something based on income…..You could take zero for the first nine years (assuming your situation hasn't changed in that time) and then take the full amount in the tenth and final year. You would then call up the applicable agency, explain that you had a spike in reported income at the end of the previous year, HOWEVER, it was due to an inheritance and that your ongoing income (wages, salary, etc.) has not changed. In most states, you will be able to get the continued health care deal you had.
Not as big a deal as some may think. Again, not sure why this video suggest you have to take even distributions?
Definitely has a negative impact if you are likely to pass IRA's or 401K's to children (as we are), not only from a tax standpoint but lifestyle risks. What happens in year 11 if you have gotten used to those distributions and "built" them into your spending habits? We will be having conversations about that! Also, I believe that the Secure Act does not cover IRA's that were inherited before its passage.
Too late for those who contributed expecting kids to benefit from lifetime withdrawals. Get your company match and then put what you can in a taxable investment account. Also my tax rate with 2 SS and RMD's will be higher than my last years of employment.
Thank you Josh for the information!
There very few reasons when you should contribute to a pre tax retirement account. Roth and brokerage are king
Another reason to have annuities. They still will count toward income but it will be stable assuming you purchased life with a certain period, (say like 20 yrs). NO RMD's