‘I Have 3 Children That Will Inherit My 401(k). How Is The RMD Completed?’ Here’s What Suze Orman Says
From Yahoo Finance: 2025-04-23 13:31:00
Planning to pass down your 401(k) to your kids? Suze Orman explains the complexities of inherited IRAs and the 10-year rule for non-eligible beneficiaries. Make sure your beneficiaries understand the rules and consider converting to a Roth for tax benefits. Consult a financial advisor for personalized guidance.
Orman emphasizes the importance of setting up inherited IRAs for each child to maximize distribution flexibility. With the 10-year rule in place for non-eligible designated beneficiaries, understanding RMD calculations is crucial. Planning ahead can save your family confusion and taxes in the long run.
If one of your children is a minor when inheriting your 401(k), distribution rules vary until they turn 21. After that, they must adhere to the 10-year rule. Roth retirement accounts offer tax benefits, but rules still apply. Consider converting to a Roth and discuss with a professional for tailored advice.
Orman’s advice on 401(k) inheritance sheds light on the importance of proactive planning. Ensure your beneficiaries are well-informed about RMDs, inherited IRAs, and the 10-year distribution rule. Taking steps now can prevent future confusion and tax implications for your loved ones.