Understanding the Rules for Inherited IRA Distributions

June 30, 2022
The rules surrounding distributions from inherited retirement accounts can be confusing for beneficiaries. Prior to the Secure Act, designated beneficiaries had the choice to withdrawal required minimum distributions based on their own life expectancy or within five years of the original owner’s death. Since the Secure Act, almost every designated non-spouse beneficiary who inherits a traditional retirement account in 2020 and beyond will have to withdrawal all funds within 10 years. If a traditional retirement account is left to the owner’s estate, the beneficiary will be forced to withdrawal the funds within 5 years. These accelerated distributions can push beneficiaries into higher tax brackets and lead to larger tax bills.

At Brandywine Oak, we guide our clients through the proper ways to structure their beneficiaries in order to transfer funds in the most tax-efficient manner. To learn more about inherited distribution rules, please read Think Advisor’s

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