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Inheriting an individual retirement account isn't like inheriting most other assets. With an inherited IRA, there are a lot of moving parts in terms of the type of IRA, the payout options, who the...
An inherited IRA may be taxable, depending on the type. If you inherit a Roth IRA, you’re free of taxes. But with a traditional IRA, any amount you withdraw is subject to ordinary income taxes.
But if you’ve inherited a traditional tax-deferred IRA, withdrawals will be taxed as ordinary income. So if you make $65,000 a year, withdrawing $35,000 from an inherited traditional IRA would ...
Inheriting an IRA as a beneficiary can increase your financial security. But, because an inherited IRA usually imposes a 10-year distribution schedule, the account may also create larger tax ...
There are several types of IRAs: Traditional IRA – Contributions are mostly tax-deductible (often simplified as "money is deposited before tax" or "contributions are made with pre-tax assets"), no transactions within the IRA are taxed, and withdrawals in retirement are taxed as income (except for those portions of the withdrawal corresponding to contributions that were not deducted).
Inheriting an IRA isn't quite as simple as taking the money and going on your way. Since an IRA is a tax-advantaged vehicle, you'll have to strategize how to maximize the value of the account ...