Inherited IRA’s The Unrecognized Tax Problem (Elimination of Stretch IRA’s)
Very quietly there was an unrecognized tax increase starting in 2020. The secure act signed in Dec 2019 eliminated stretch IRA’s for most non-spouse beneficiaries.
Under the new rules, the non-spouse person who inherits an IRA has 10 years to take the money out. There is not a uniform amount that needs to be taken out each year, just that all the money has to be out after 10 years. The issue is that if you earn a reasonable return say 6%, and you want to take a uniform amount each year, you are going to have to take out about 13.6% per year. This is a large increase.
If you want to keep your tax level the same, a lot of tax planning is needed. Wealth management is a math problem that continues to evolve. We enjoy solving this problem.
#Inherited IRA #tax
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