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Inherited IRA Strategies - IRA, 401k, and Roth Conversion Planning

Inherited IRA Strategies - IRA, 401k, and Roth Conversion Planning

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In this episode, we talk through the inherited IRA rules that changed under the SECURE Act and why many families still feel confused about required minimum distributions. The old stretch IRA rules allowed many beneficiaries to take distributions over their lifetime. Now, for most non-spouse beneficiaries, inherited IRA money has to come out within 10 years. That shift makes planning much more important, especially when taxes, Roth conversions, charitable giving, and family timing are all involved. 📚 Get Bruce’s Book: Moving To Tax-Free (on Amazon) https://amzn.to/4msRo2k ⏱️ Chapters & Timestamps (00:19) How the SECURE Act Changed Inherited IRAs (01:50) Three Types of IRA Beneficiaries (04:02) Required Beginning Date Rules (06:00) Spousal Rollover Options (07:03) Avoiding the 10% Early Withdrawal Penalty (09:09) Using Inherited IRAs for QCDs (11:38) Separate RMD Rules for Inherited IRAs (12:04) Paying Roth Conversion Taxes With IRA Funds We start by breaking down the three main beneficiary categories. Eligible designated beneficiaries usually include spouses, minor children under 21, disabled or chronically ill beneficiaries, and in some cases someone close in age to the original IRA owner. Non-eligible designated beneficiaries are usually adult children, nieces, nephews, or other individual heirs who do not qualify for the special carve outs. These beneficiaries generally fall under the 10-year rule. Non-designated beneficiaries are not people. That usually means an estate, charity, or certain trusts. We also explain how the required beginning date changes the rules. For many IRA owners, this is tied to age 73, or age 75 for those born after 1960. Roth IRAs are treated as if the owner died before the required beginning date. That detail matters because the timing of death can change whether annual RMDs are required during the 10-year period. A major strategy in this episode is for a younger surviving spouse. A widow under age 59 and a half may not want to immediately roll an inherited IRA into her own IRA. Keeping it as an inherited IRA may allow her to access funds without the 10 percent early withdrawal penalty. The withdrawals are still taxable as ordinary income, but that penalty exception can create flexibility during a difficult transition. We also cover qualified charitable distributions from inherited IRAs. If the beneficiary is at least 70 and a half, they may be able to make QCDs from an inherited IRA. For 2026, the annual QCD limit discussed is $111,000. This can help satisfy the inherited IRA distribution requirement while sending money directly to charity without creating taxable income. The final planning idea is using inherited IRA distributions to pay taxes on Roth conversions from a person’s own IRA. Since inherited IRAs generally cannot be converted to Roth IRAs, using those distributions to cover tax bills can preserve other retirement assets and support a long-term Roth conversion plan. The key takeaway is that inherited IRAs often need to be drained within 10 years, so it can make sense to use that money first for taxes, charitable giving, or cash flow. For more information about anything related to your finances, contact Bruce Hosler and the team at Hosler Wealth Management: Visit us online at https://www.hoslerwm.com/Contact Our Team: https://hoslerwm.com/contact-us/Or call our Prescott office at (928) 778-7666 or our Scottsdale office at (480) 994-7342.For more podcast episodes, visit our podcast website at https://hoslerwm.com/protectingwealthpodcast/Limitation of Liability Disclosures: https://www.hoslerwm.com/disclosures/Link Disclosure: The information being provided is strictly as a courtesy. When you link to any of the websites provided here, you are leaving this website. We make no representation as to the completeness or accuracy of information provided at these websites. Nor is the company liable for any direct or indirect technical or system issues or any consequences arising out of your access to or your use of third-party technologies, websites, information, and programs made available through this website. When you access one of these websites, you are leaving our website and assume total responsibility and risk for your use of the websites you are linking to.Copyright © 2022-2026 Hosler Wealth Management | All Rights Reserved. Produced by JAG Podcast Productions - www.jagpodcastproductions.com. #ProtectingWealthPodcast #ProtectingandPreservingWealthPodcast #HoslerWealthManagement #BruceHosler
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