In this video, Colin Exelby, CFP®, breaks down the important rules for handling your inherited IRA.

Inheriting an Individual retirement account (IRA) comes with different rules and considerations that may significantly impact your financial planning.

Understanding these inherited IRA distribution rules can have a significant impact on your short-term and long-term financial situation.

Tax planning is about making strategic choices within the tax code, and knowing your options will help you maximize tax efficiency and preserve your inherited assets.

⬇️ DISCLAIMER :

Outstanding Personal Finance Tools👇

Budgeting…👇
★☆★ Rocket Money (originally called as TrueBill) ★☆★

Wealth Management…👇
★☆★Personal Capital ★☆★👇

Bookkeeping…👇
★☆★Gusto Bookkeeping★☆★👇

OTHER RESOURCES

★☆★ Financial Freedom 2023: How to Create a Tax-Free Retirement Income ★☆★

★☆★ How to Create a 💯 % Tax-Free Retirement Income PLAYLIST ★☆★

★☆★ Book Your Free Consultation! ★☆★

[About] Colin Exelby is a Certified Financial Planner Professional™ or CFP®. He owns the virtual financial advisory practice Celestial Wealth Management.

I provide financial planning for business owners and their families that makes sense.

We strive to help you:
*Optimize Your Cash Flow
*Minimize Your Taxes
*Build Your Net Worth
*Create a Lasting Legacy

➡️ ➡️Free Guide Here:

Do you watch Dave Ramsey, Robert Kiyosaki, Grant Cardone, Gary Vee, Graham Stephan, Meet Kevin, Ryan Scribner, Replace Your Mortgage, Project Life Mastery, Russel Brunson, Alex Becker, Tanner J Fox, Refusing to Settle, Dan Lok, Jeff Rose, Tai Lopez, Bigger Pockets, or Pat Flynn? Then you’ll love our channel! Be sure to subscribe and I’ll see you in the comments!

Affiliate Link Disclaimer: I only recommend products I would use myself and all opinions expressed here are our own. This post may contain affiliate links that at no additional cost to you, I may earn a small commission. Read full privacy policy at celestialwm.com.

TAGS – colin exelby,7 Rules for An Inherited IRA | Personal Finance Tips,financial planning for business owners,retirement planning for business owners,certified financial planner,cash flow management,debt management,celestial wealth management,inherited IRA,IRA,Inherited an IRA,Inherited IRA Rules,10 Year Rule,Inheritance,Individual retirement account,retirement planning,Non-spouse Inherited IRA,IRA Rules,Beneficiary,Inherited Taxes,Inherited IRA Distribution,401k, Inherited IRA – IRS Change to 10 Year Rule, Understanding The Latest Rules for Inherited IRAs, The IRS Changed Inherited IRA Rules (Do Not Mess This Up), Non-Spouse Inherited IRAs & the 10 Year Rule: Are RMD’s required?, Inherited IRA What To Do?, What Should We Do with an Inherited $700,000 401(k)?, Minimizing taxes on inherited IRA, A Method To Help Families Minimize Taxes on IRAs, Paying Tax On Inheritance, How Do Inherited IRA’s Work For Non-Spouse Beneficiaries – New Rules, Beneficiary IRAs: What to Know, What to do with inherited IRA Required Minimum Distribution | Christy Capital Management, Can I Reinvest My RMD Into My Roth IRA?, Inherit an IRA? You Need to Know This in 2022…, The New SECURE Act and Its Effect on The Inherited IRA and Stretch IRA, What happens when a spouse inherits an IRA?, Inherited IRA – What Are Your Options, 2023 RMDs on Inherited IRAs – Update from IRS on Required Minimum Distributions (RMDs)., Inherited IRAs- Beneficiary Tax Options, What Should I do If I Inherited an IRA (or 401k, 403b, etc), Inherited IRAs Under the 10 Year Rule IRS Update, Inherited IRA Withdrawal With No TAX, Inherited IRA: What to do Next, A Method To Help Families Minimize Taxes on IRAs, How to invest an Inherited IRA, Inherited IRA Distribution Rules. IRS provides guidance and relief on the new 10 year rule., REDUCE taxes on big withdrawal from INHERITED IRA, Adam Talks – Inherited IRA Rules Update, Inherited Roth IRA Roadmap, Inherited IRA Rules and Tax Strategy, How to Plan Financially If You Expect an Inheritance, Inherited $2,800,000, What Should I Do With It?, The Smartest Thing To Do With An Inheritance, What Do I Do With My $20,000 Inheritance?, I’m 19, How Do I Not Blow My $100,000 Inheritance?, Are You Getting Inheritance Money? 4 HUGE $$$ MISTAKES YOU DON’T WANT TO MAKE, What is an inheritance?, What Should We Do with an Inherited $700,000 401(k)?, Financial Planning Strategies When You Receive an Inheritance, Inheriting Money ? 4 Things To Do When Receiving an Inheritance…(read more)

LEARN MORE ABOUT: IRA Accounts

TRANSFER IRA TO GOLD: Gold IRA Account

TRANSFER IRA TO SILVER: Silver IRA Account

REVEALED: Best Gold Backed IRA

7 Rules for An Inherited IRA | Personal Finance Tips

An inherited Individual retirement account (IRA) can be a valuable asset to receive, but it also comes with certain rules and regulations that must be followed. Understanding these rules is crucial to ensure you maximize the benefits and avoid penalties. Here are 7 rules to keep in mind when handling an inherited IRA.

1. Know your options: As the beneficiary of an inherited IRA, you have various options to consider. You can choose to disclaim the account, take a lump-sum distribution, or set up an inherited IRA. It’s essential to understand the advantages and disadvantages of each option before making a decision.

2. Determine your distribution method: If you decide to set up an inherited IRA, you will need to determine your distribution method. There are two general options: “life expectancy” method and “five-year” method. The life expectancy method allows you to stretch the distributions over your own life expectancy, while the five-year method requires the entire balance to be distributed within five years.

3. Understand the required minimum distributions (RMDs): Just like any other IRA, inherited IRAs have RMDs that must be followed. The exact RMD amount depends on the age of the original account holder at the time of their death. Failing to take the required distribution can result in hefty penalties, so make sure to calculate and fulfill your RMD obligations on time.

4. Be aware of the tax implications: It is important to understand the tax implications associated with an inherited IRA. Generally, distributions from a traditional inherited IRA are subject to ordinary income tax rates, while distributions from a Roth inherited IRA are usually tax-free. Consulting with a tax professional can help you understand the potential tax consequences.

5. Consider the impact of your age on RMDs: If you inherit an IRA from someone considerably older or younger than you, it can affect your RMDs. If you are younger, your RMDs may be smaller, allowing the account to potentially grow over time. Conversely, if you are older, the RMDs may be larger, which could have tax implications. Understanding the impact of age difference is crucial in managing the inherited IRA effectively.

6. Be mindful of potential penalties: There are penalties associated with making mistakes or not following the rules of an inherited IRA. Taking distributions too early, missing RMD deadlines, or failing to follow the specific distribution method can result in penalties. Familiarize yourself with the rules to avoid costly mistakes.

7. Evaluate your options for additional contributions: As the beneficiary of an inherited IRA, you cannot make contributions to it. However, you have the option to roll over the assets into your own IRA if you are eligible. This can provide greater flexibility and control over the account, allowing you to make additional contributions and potentially benefitting from tax advantages.

Inheriting an IRA comes with both opportunities and responsibilities. By understanding and adhering to the rules mentioned above, you can effectively manage the inherited IRA and maximize its potential benefits. Always consult with a financial advisor or tax professional to ensure you are making informed decisions in accordance with your unique circumstances.