Reply to If you are keeping an inheritance separate from marital funds, how do you handle inherited IRA

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[quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous]Why "thanks Trump"? This money has never been taxed, it's always the law that pre-tax funds get taxed when withdrawn, has nothing to do with who is president.[/quote]

The SECURE Act of 2019 put a ten year time limit on withdrawing from inherited IRAs. Before that law, you could stretch the withdrawals out more. This hurts people who inherit money when they are younger and are still working. [/quote]

Meh, it prevents the money from remaining untaxed for decades.  If op had her way, she’d just pass it on to her own kids as an inheritance some forty-odd years from now.  I inherited an IRA from my father and I think 10 years is plenty of time to distribute the funds.  [/quote]

No if I had my way I could at least wait until 65 to take the money out instead of being punished for the fact that I happened to inherit money in my peak early years vs when I was approaching retirement. I make a lot more than my parents ever did so this money is being taxed at a much higher rate than if my parents hadn’t put it in a 401K.[/quote]

IRAs were never meant to be for generational wealth transfer.  The old way money could be passed for generations and never taxed.  I am sorry  it's not optimal for you but I think it's a good policy.  Remember you only pay the higher rates on part of your income.[/quote]

So why not blame them instead of Trump? It's never been wise to put too much into IRAs--they are not tax-free, they are tax-deferred. Do you think that money should never be taxed? And you do you even understand how taxes work?[/quote]

Op here. I understand taxes. What I thought was unfair was that my parents saved in their 401K under rules that allowed withdrawals from an Inherited IRA to be spread out. And then just before they unexpectedly died the rules governing the money they already saved was changed. There was not enough time for them to adjust. Obviously I am adjusting my savings strategy based on the new rules but that is because I was in my 30s when the law changed. My parents were not rich, they never took vacations, they bought used cars and drove them until they had 200,000 miles on them. they saved and invested and now because of a change in the law that money they saved is being taxed based on a level of income that is 4x what they ever earned.

But regardless I was asking for advice about how to handle the taxes on the larger withdrawals while filing taxes with my husband and got some good advice on that so thanks to the PPs who responded to my original question. [/quote]

So unfair! You poor, poor multimillionaire!

Your parents didn't spend the money and didn't give it away before they died. They literally can't care what happens to it now. It seems they knew how to live well without it. You can live well with half of it.
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