Retirement accounts like IRAs, 401(k)s, and 403(b)s come with a major tax benefit—you don’t pay taxes on the money when you contribute, and it grows tax-free over time. But there’s a catch:
Understanding Required Minimum Distributions (RMDs)
✔️ Once you turn 73, you are required to start withdrawing a minimum amount each year (RMDs), which is then taxed as income.
✔️ If you pass away, your spouse can continue taking RMDs over their lifetime.
✔️ But for children or other heirs, the rules are different.
How the SECURE Act Changes Inherited Retirement Accounts
❌ Children and most non-spouse beneficiaries now must withdraw the full balance within 10 years.
❌ This means they could face a huge tax bill if they inherit a large retirement account.
❌ There are exceptions for minors and individuals who qualify as disabled, but the rules are complicated.
Smart Planning Can Reduce Taxes
Tax-efficient strategies can help you protect your legacy and reduce the tax burden on your loved ones, but planning ahead is crucial.
If you’ve inherited a retirement account or want to make sure your heirs don’t pay more taxes than necessary, give me a call to discuss your options.
