At Extreme Investor Network, we strive to provide you with unique and valuable information to help you navigate the complex world of personal finance. Today, we want to discuss a recent update from the IRS regarding required withdrawals for heirs of inherited retirement accounts.
Since the Secure Act of 2019, heirs of retirement accounts have faced changes in the rules for required minimum distributions (RMDs). Under the new regulations, certain heirs must empty inherited accounts within 10 years of the original account owner’s death, potentially leading to increased tax liabilities.
The IRS has recently extended penalty relief for missed RMDs until 2024 for specific heirs, known as “non-eligible designated beneficiaries.” While this may seem like a reprieve, it could also be seen as risky, as it postpones decision-making and may require larger future distributions to comply with the 10-year deadline.
Certified financial planner Edward Jastrem warns that delaying RMDs could result in a need for larger distributions in the future, particularly with pending changes in tax brackets. With tax brackets set to revert to 2017 levels without congressional intervention, it may be wise to consider making withdrawals in 2024 to take advantage of lower rates.
However, it’s crucial to evaluate your entire financial situation before making any decisions regarding inherited retirement account withdrawals. As Ed Slott, an individual retirement account expert, emphasizes, it’s essential to consider all the moving parts and factors at play.
At Extreme Investor Network, we understand the complexities of personal finance and are committed to providing you with expert insights to help you make informed decisions. Stay tuned for more exclusive content and valuable tips to maximize your financial portfolio.
