Have you inherited an IRA from a non-spouse who passed away after 1/1/2020? Beneficiaries of pre-tax retirement accounts have always had to pay taxes on what they inherit. However, on 1/1/2020, the SECURE Act was passed, changing the annual amount that beneficiaries would have to withdraw. Beforehand, non-spousal beneficiaries could:

1. Cash out the account in one lump sum and pay taxes on that amount
2. Take the account out over five years and pay taxes on it
3. Take distributions the year after the account owner passed away and take withdrawals over their lifetime (a stretch IRA)

Most non-spousal beneficiaries must empty their inherited account within 10 years following the original owner's death (there are some exceptions for someone who is disabled, the chronically ill, those who are within 10 years of age of the deceased, and minor children).

Unfortunately, the IRS made some changes. Learn what it is—and if it impacts you—in this episode of Retire with Ryan.

• [1:50] My on-demand Retirement Readiness Review Course
• [2:16] What’s new with inherited IRAs?
• [5:56] The IRS announcement about required minimum distributions
• [9:32] The IRS changed the penalty for missing IRA distributions
• [10:07] IRS Notice 2044-25: The RMD for 2024 is being waived
• [11:13] What should you do with this information?
• [13:04] What if you inherited a Roth IRA?

Everyone thought that non-eligible beneficiaries who opted for the 10-year window could choose how to withdraw the funds (as long as the account was emptied). We thought that you could minimize distributions in years where their income was higher and take higher distributions when their income was lower, choosing when to pay taxes on the account (and avoiding being in a higher tax bracket).

Unfortunately, in February 2022, the IRS issued regulations to reflect the changes in the SECURE Act. They divided non-eligible beneficiaries into two groups:

1. People who inherited an account from someone who passed away before they reached their RMD age.
2. Someone who passed away after they reached their RMD age.

If you inherit an IRA from someone who hadn’t yet reached their RMD age could wait until the 10th year to take distributions. However, if the person died after they’d started taking RMDs, the beneficiary would have to take distributions out every year (continuing the distributions of the original owner).

Thankfully, the IRS extended some relief and said if you were supposed to take RMDs in 2021–2024, the requirement would be waived.

The IRS also changed the penalty for missing IRA distributions from 50% and reduced it to 25%. If you missed a year where you were supposed to take it—as long as you make up the difference in two years—the penalty would be reduced to 10%.

It’s time to do some tax projections of your future income. If you’ve inherited a retirement account, you must deplete it in the next 10 years. If you anticipate being in a higher tax bracket in the future, it may make more sense to take a distribution this year in a lower tax bracket.

If you inherited an IRA in 2020, you still have seven years left to empty the account. How will it impact your taxes? Where will a distribution land you on the tax bracket scale?

What if you inherited a Roth IRA? Listen to hear how required minimum distributions work for an inherited Roth IRA!

• Retirement Readiness Review
• Subscribe to the Retire with Ryan YouTube Channel
• New Beneficiary IRA Distribution Requirements, #180

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If you are divorced and approaching 62, you may qualify for social security benefits based on your ex-spouse's earning record. But who qualifies? When can you collect it? How much can you collect? Does your ex-spouse find out? I’ll answer the things you need to know in this episode of Retire with Ryan.

• [1:11] Sign up for Retirement Readiness Review
• [1:46] Divorce and social security
• [3:12] What makes you eligible for the benefit?
• [6:28] Other things you need to know
• [8:06] How much can you receive?
• [11:49] What if your ex-spouse is deceased?
• [13:51] How to apply (and what you need)
• [16:43] What should you do if you’re divorced?

You’re eligible if:

• You were married at least 10 years
• You haven’t remarried
• Your ex-spouse is 62 or older and eligible for benefits
• The divorce occurred at least two years prior to applying
• Your ex-spouse doesn’t need to have filed for benefits

Your own benefit cannot be higher than the spousal benefit. That simply means that you’re able to apply for your benefits and the spousal benefit and choose the higher of the two. You’re eligible for up to half of your ex-spouse's benefit or your own.

What else do you need to know?

• Benefits for current or other ex-spouses are not affected. If your ex-spouse is collecting, it won’t impact what they’re receiving.
• Secondly, your ex-spouse cannot stop you from claiming this benefit. They have no control over this.
• Divorce settlements have nothing to do with this. If you qualify, you’re entitled to the benefit.
• Lastly, any ex-spouse can claim benefits. Your spouse could claim up to half of your benefit as well.

If you were born after 1960, your full retirement age is 67 or later. For anyone born before 1959, your full retirement age is 66 and 10 months. Every year before that the full retirement age decreases by two months. Why is this important?

To get the full 50% ex-spousal benefit, you have to wait until your full retirement age. If your full retirement age is 67 and you want to collect at 62, you’d get 32.5% of your ex-spouse’s full retirement benefit. If you waited until you turned 63, you’d get 35%. The percentage increases every year until it caps at 50% when you hit your full retirement age.

If you claim your benefit before your full retirement, there’s also a limit to how much you can earn and still receive the benefit. The earnings limit in 2024 is $22,320. That limit is in effect from 62–66. If you earn over that amount, your benefit will be reduced by $1 for every $2 you make over $22,320.

The year you retire, you can make up to $59,520 before your benefit is reduced by $1 for every $3 you’re over. Starting the month you retire, there’s no limit and you can receive your full benefits.

This is known as a surviving divorced spouse benefit. The same eligibility rules apply—with a few changes:

• You can start climbing benefits as early as age 60 (with a reduction)
• You can apply for the survivor benefit as a restricted application and let your own benefit grow

If your benefit is more than half of your deceased ex-spouse’s benefit, you can collect the percentage you’re eligible for while yours continues to defer. Your benefit caps out at 70 at which point you’d collect your benefit.

• Retirement Readiness Review
• Subscribe to the Retire with Ryan YouTube Channel
• Online social security calculator
• SSA.gov

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Medicare is confusing and complicated. Most people nearing retirement age have likely heard numerous mistruths regarding when to get it, what it does for you, and so much more. That’s why I’m busting the 10 most commonly perpetrated Medicare myths so you’ll know how to discern fact from fiction—and put your mind at ease.

• [0:53] Sign up for my online course: Retirement Readiness Review
• [1:21] Myth #1: You have to enroll in Medicare when you turn 65
• [2:57] Myth #2: You’re automatically enrolled in Medicare when you turn 65
• [3:55] Myth #3: Medicare will tell you when it’s time to enroll
• [4:27] Myth #4: Medicare is free
• [5:52] Myth #5: Your income levels impact whether or not you qualify
• [6:28] Myth #6: Having COBRA allows you to delay enrollment
• [7:16] Myth #7: You should enroll in Medicare Part A as soon as you can
• [8:54] Myth #8: Medicare Advantage plans are expensive
• [9:52] Myth #9: Medicare Advantage plans are better than Medigap plans
• [11:42] Myth #10: Once you select a plan, you’re stuck with it

This is false. If you have job-based health insurance with a company that has 20 or more employees, you don’t have to sign up for Medicare immediately. You can wait to sign up until you stop working or you lose your health insurance. Why would you want to?

There may be excess costs you wouldn’t need to pay if you still have insurance through your employer. But if you’re self-employed or don’t have an insurance policy that covers more than 20 people, and you don’t want to sign up for Medicare, you’ll get hit with a late enrollment penalty.

You’re only automatically enrolled if you’re already collecting Social Security when you turn 65. Everyone else has to enroll during the three months before they turn 65 or the three months after their 65th birthday month. If you’re not going to enroll at 65, you have an 8-month window to enroll after your insurance coverage ends (or you’ll be subject to a penalty).

Keep in mind that Medicare will not tell you when it’s time to enroll. Though you’ll get a lot of advertisements in the mail for supplemental plans, Medicare will not send you a reminder. To enroll, you go to SSA.gov and click on “enroll in Medicare.”

Medicare Part A covers part of the cost of a hospital stay. As long as you or your spouse has worked for 10 years or more in the United States, Part A is free. However, Part B (which covers preventative care) starts at $174.70 per month.

Everyone pays the minimum premium and depending on your income level, you may pay far more. The premium may increase every year. There are many other expenses that Medicare doesn't cover.

Many people also say that you should enroll in Medicare Part A as soon as you can because it’s free. This makes sense—only if you don’t have a high-deductible insurance plan. But with high-deductible health plans, you’re typically eligible for an HSA.

As soon as you enroll in Part A, that disallows you—and your employer—from making contributions to an HSA. You also have to remove any contributions you’d made from the prior six months before enrolling.

I tackle a lot more myths you need to be aware of, so make sure you listen to the whole episode!

• Retirement Readiness Review
• Subscribe to the Retire with Ryan YouTube Channel

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How can you protect your data and personal information from IRS scammers and criminals? Everyone is afraid of being audited by the IRS. Maybe you’re scared you may have filed your taxes incorrectly. Criminals take advantage of that fear to perpetuate their scams. But there are some simple things you can do to avoid falling victim to these scams. I’ll share 7 tips you can use to protect yourself from IRS scammers in this episode!

• [1:15] Sign up for the Retirement Readiness Review!
• [2:42] Tip #1: The IRS only reaches out through the mail
• [4:43] Tip #2: Be suspicious of emails from the “IRS”
• [6:26] Tip #3: Don’t send checks through the mail
• [7:44] Tip #4: Protect your personally identifiable information (PII)
• [8:49] Tip #5: Pay your bills electronically when possible
• [9:15] Tip #6: Request direct deposit for paychecks
• [10:14] Tip #7: Set up two-factor authentication

Did you know that the IRS doesn’t make phone calls or leave voicemail messages? They won’t send a text or contact you on social media. They don’t use email either. If the IRS has a problem with you, they’ll send you a letter.

So if you get a phone call saying someone is from the IRS and they need more information from you, hang up, and block their phone number (and report it as spam).

These scammers threaten people, saying they’ll lose their immigration status, driver’s license, business license, or they’ll call law enforcement to arrest them. Don’t fall victim to these threats.

If you do receive a letter from the IRS, don’t panic. The majority of the time it’s a simple fix that your CPA or financial advisor can help you navigate. It may be as simple as a missing 1099.

Anytime you get an email from someone unfamiliar, hover over the address of the email to see who it’s from. You’ll see mistakes in the email addresses (often misspellings) from scammers. Make sure you never click on any links in an email before you know it’s from someone or a business you trust.

If you click on one of these links, you’re allowing the scammer into your computer or phone. They can install spyware or hijack your files. They’ll lock your files and demand a ransom to get them back. 10 years ago, this happened to me.

PII is your social security number, DOV, driver’s license, bank account information, etc. Don’t email anything that contains your PII—even if it’s to someone you know and trust. If your email is ever hacked, the hackers can access this information and use it to open accounts in your name. Most financial firms offer upload options such as Box or ShareFile.

One of the best things you can do to protect your information is to set up two-factor authentication whenever you can. Two-factor authentication requires that you offer two ways of proving that it’s you logging in. You may need to provide a username, password, and PIN.

You can use an authenticator app that provides a PIN that resets every 30 seconds. Or, you can have a pin texted to you. If a scammer can steal your username and password, they probably can’t breach the two-factor authentication.

• Retirement Readiness Review
• Subscribe to the Retire with Ryan YouTube Channel
• ShareFile
• Box
• USPS Informed Delivery

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Do you usually get a tax refund? What do you typically do with your tax refund? Do you have it earmarked for a specific purpose? As we’re inching closer to the tax filing deadline, I thought it would be interesting to share some ways you can wisely invest your tax refund. I’ll cover 9 ideas you can consider to make good use of your money.

• [1:42] Why are you getting a tax refund?
• [2:36] Idea #1: Save it for next year's taxes
• [3:03] Idea #2: Increase your savings
• [4:05] Idea #3: Pay down high-interest debt
• [4:49] Idea #4: Contribute to a Roth IRA
• [5:12] Idea #5: Home improvement projects
• [6:02] Idea #6: Increase retirement contributions
• [7:08] Idea #7: Plan a vacation
• [7:51] Idea #8: Invest in yourself
• [8:32] Idea #9: Buy US Savings Bonds

If you’re getting a tax refund, you should be asking why. You’re giving the government a free loan for the entire year. You aren’t paid interest when you receive a refund. Why not investigate if you can increase your withholdings, so you can keep more of your money? If you are going to get a refund, here are some ways you could invest it.

1. Save it for next year's taxes: If you think your taxes will increase because your income fluctuates, it might be a good idea to set the money aside in a short-term CD or money market.
2. Increase your savings: You need 3–6 months of living expenses in an emergency fund (which could be kept in a short-term CD or money market) in case you lose your job or another unexpected situation arises.
3. Pay down high-interest debt: If you’re carrying credit card or student loan debt in excess of 10%, pay it off as soon as possible. Why 10%? Because it’s hard to earn more than 10% over time in the stock market as an average annual return.
4. Contribute to a Roth IRA: If you don’t have a Roth IRA, you can set one up (provided you qualify) and start contributing to it.
5. Home improvement projects: Improving your kitchen or bathroom(s) can increase the value of your home down the road. Even an outdoor patio or deck space may be a good investment to get a return on your money.
6. Increase retirement account contributions: If you still have room to contribute to your 401k, you can increase what you contribute through payroll contributions. Or, you can shift your tax refund into the account over time. If you contribute more throughout the year, less will be sitting with the IRS for you to get back in a tax refund.
7. Plan a vacation: We don’t know what the future holds. If you’ve wanted to plan a specific trip for a long time, why not take some of this money and invest it in a trip?
8. Invest in yourself: Can you take a course? Get a designation in your field? These things can pay large dividends down the road, especially if they help increase your income or get you closer to a job promotion.
9. Buy US Savings Bonds: The interest they pay is based on a fixed rate when you buy the bond and a variable rate tied to the consumer price index. You’d always get a minimum for the life of the bond and a variable rate every six months.

Listen to the whole episode for a more in-depth look at each idea!

• Retirement Readiness Review
• Subscribe to the Retire with Ryan YouTube Channel
• I bonds interest rates

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