From Yahoo Finance: 2025-04-21 09:15:00

When you inherit a retirement account, rules change. Depending on your relationship to the original owner, you may need to withdraw the money within 10 years. Spousal beneficiaries have options like taking RMD distributions, withdrawing the amount within 10 years, or rolling the account into their own IRA.

Eligible designated beneficiaries have similar options, including taking RMD distributions or withdrawing the entire amount within 10 years. Designated beneficiaries must follow the 10 Year Rule and withdraw all assets within 10 years of inheriting the account. Tax implications vary based on your specific situation, and consulting a financial advisor is recommended for guidance.

As a spousal beneficiary with an inherited 401(k), rolling the money into an IRA you own is a smart move. Rolling into a traditional IRA won’t trigger a tax event, while a Roth IRA rollover will trigger conversion taxes. This decision can impact your tax liability, so consulting a financial advisor is crucial for making the best choice. Rolling over a 401(k) into a Roth IRA could result in $180,514 in conversion taxes, leaving $434,486 in the Roth IRA. Traditional IRAs are subject to RMDs, which must begin at age 73 or 75, depending on current age. Leaving the 401(k) in place allows for self-management and RMDs based on life expectancies.

Minimum distributions from the inherited 401(k) will be taxed, with amounts based on the account balance. Spousal beneficiaries can choose between RMDs or the 10-year rule for distributions. Using the 10-year rule can minimize taxes through staggered withdrawals. Leaving the funds in place maximizes compounding returns.

Inherited retirement accounts offer various options for managing funds after a spouse’s death. Working with a financial advisor is crucial for developing a comprehensive retirement plan. Estate planning and keeping an emergency fund are essential financial tasks to address to avoid surprises and ensure financial stability.

Financial advisors can use SmartAsset AMP to connect with leads and improve marketing strategies. Comparing savings accounts from different banks can help optimize cash management. Estate planning is crucial to prevent confusion and potential disputes among loved ones. 1. The stock market hit record highs today, with the S&P 500 closing at 4,400 points, a 0.8% increase. Tech stocks led the way, with Amazon and Google both seeing gains of over 2%. Analysts attribute the surge to positive economic data and strong corporate earnings reports.

2. In COVID-19 news, the CDC reported over 100,000 new cases in the US yesterday, the highest daily total since February. Hospitalizations are also on the rise, with several states seeing a surge in patients. Health officials are urging the public to get vaccinated and continue practicing safety measures.

3. Climate activists are celebrating a major victory as a federal judge ruled that the Dakota Access Pipeline must shut down and undergo a full environmental review. The pipeline, which transports oil from North Dakota to Illinois, has faced years of protests and legal challenges over concerns about water contamination.

4. The Tokyo Olympics are officially underway, with the opening ceremony taking place last night. Despite a year-long delay and strict COVID-19 protocols, athletes from around the world are competing in various events. The games are being held without spectators in an effort to prevent the spread of the virus.



Read more at Yahoo Finance: I Inherited My Husband’s 401(k) With $615k. How Do Handle This Money to Reduce Taxes?