EYE ON MONEY: Why inherited IRA’s deserve your attention

Published: Apr. 14, 2022 at 10:05 AM CDT
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DULUTH, MN. (CBS 3 Duluth) - If you have significant pre-tax investments like IRA’s and 401k’s, it’s possible your heirs will have a tax headache when you’re gone, thanks to the Secure Act.

In this week’s Eye on Money, Scott Wallschlaeger with MPPL Financial talked about the law changes and what it could mean for you.

The Setting Every Community Up for Retirement Enhancement Act, otherwise called the SECURE Act, was signed into law just before the pandemic hit.

According to Wallschlaeger, this is a far-reaching piece of legislation, with several significant provisions intended to help individuals better prepare for retirement.

The biggest drawback is the elimination of the Stretch IRA for most non-spouse inheritors.

As a result of the SECURE Act, most non-spouses inheriting IRAs are required to take distributions that empty the account within ten years.

Previously, the Stretch IRA allowed the inheritor to extend distributions over their lifetime.

Wallschlaeger says if you’ve inherited an IRA since January 1, 2020, or you will leave an inheritance to your heirs, you may want to consider working with a trusted financial advisor to help guide you in planning the most tax-efficient way to transfer these assets to maximize the potential value of the gift.

You can catch Eye on Money every Wednesday at 6:15 a.m. on CBS 3 This Morning for more weekly financial tips.

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