Spousal Inherited IRA: Take It or Leave It

If you are married, you may have discussed with your spouse what you plan to do with each others estates should one of your pass before the other. This discussion–and other similar ones–is important and can make the period after the passing of a spouse less difficult than it needs to be. As part of those discussions, you may want to talk about what you both will do with an Inherited IRA, if you or your partner have one. There are really three main options for the spouse inheriting the IRA. The first is to leave the IRA as it Continue reading Spousal Inherited IRA: Take It or Leave It

Why Direct Transfers are the Way to Go

When you transfer money between an IRAs or between a qualified retirement plan and an IRA, you’ve probably heard that the best way to do so is through a direct transfer. But do you know why that is? First off, it’s incredibly simple as the money never touches the hands of the account holder and goes from custodian to custodian (or from account to account). Another advantage of a direct transfer is that there is no limit on the number of transfers that can be done over the course of a year, unlike a 60-day rollover which you are limited Continue reading Why Direct Transfers are the Way to Go

A Creative Way to Avoid RMDs From an Inherited Account

Do you know your options should you inherit an IRA from a spouse? There are often multiple choices regarding what you can do with the money. Furthermore, your options may be impacted by your spouse’s age when they passed, especially if they are under the age of 70½. Your age may also play a factor into your decision. One common option is to roll the IRA money into your own IRA and begin taking required minimum distributions (RMDs) either immediately if you are over age 70½ or when you turn 70½ if you are under that age at the time of Continue reading A Creative Way to Avoid RMDs From an Inherited Account

Inherit an IRA? Don’t Forget About RMDs!

If you inherit an IRA from someone–most likely a parent–who has passed away and that person was taking required minimum distributions (RMDs) at the time of passing, then you must take the RMD for the year in which the person passed, if they hadn’t already taken it. This can be easy to forget. Even if you properly title the IRA as an “inherited IRA,” you will still need to take that RMD. Thus, you should check with the IRA custodian if you ever inherit an IRA and stay on top of whether an RMD must be taken, which would be Continue reading Inherit an IRA? Don’t Forget About RMDs!

Divide and Conquer: The Benefits of Dividing an IRA

You’ve heard a lot of talk on this blog over the years about consolidating IRAs, particularly as you move through retirement and as a means of maintaining efficiency and control over your money. What we have rarely talked about is actually splitting up your IRAs, which is also a thought you may want to consider–especially if you want to leave money behind for a spouse or children. If that is the case, you should consider dividing your IRA into two, so that the spouse is named as the sole beneficiary of one of those IRAs and your child (or children) Continue reading Divide and Conquer: The Benefits of Dividing an IRA

What Would You Do With an Inherited IRA?

Do you know what you would do if you inherited an IRA? You have a couple of options, which vary based on whether you are inheriting from a spouse or if the IRA account holder was under the age of 70 1/2 at the time of death. Most likely your three options are to move the inherited IRA into an IRA of your own, keep it as a separate inherited IRA, or take a lump sum distribution. What you decide to do will be determined by your current situation as well as your future retirement plans. Also, when you decide Continue reading What Would You Do With an Inherited IRA?