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Whitaker-Myers Wealth Managers is an SEC-registered investment adviser firm. The information presented is for educational purposes only and intended for a broad audience. The information does not intend to make an offer or solicitation to sell or purchase any specific securities, investments, or investment strategies. Investments involve risk and are not guaranteed. Whitaker-Myers Wealth Managers reasonably believes that this marketing does not include any false or misleading statements or omissions of facts regarding services, investment, or client experience. Whitaker-Myers Wealth Managers has a reasonable belief that the content will not cause an untrue or misleading implication regarding the adviser’s services, investments, or client experiences. Please refer to the firm’s ADV Part 2A for material risks disclosures.

​

Past performance of specific investment advice should not be relied upon without knowledge of certain circumstances of market events, the nature and timing of the investments, and relevant constraints of the investment. Whitaker-Myers Wealth Managers has presented information in a fair and balanced manner.

​

Copyright (c) 2023 Clearnomics, Inc. and Whitaker-Myers Wealth Managers, LTD. All rights reserved. The information contained herein has been obtained from sources believed to be reliable, but is not necessarily complete and its accuracy cannot be guaranteed. No representation or warranty, express or implied, is made as to the fairness, accuracy, completeness, or correctness of the information and opinions contained herein. The views and the other information provided are subject to change without notice. All reports posted on or via www.clearnomics.com or any affiliated websites, applications, or services are issued without regard to the specific investment objectives, financial situation, or particular needs of any specific recipient and are not to be construed as a solicitation or an offer to buy or sell any securities or related financial instruments. Past performance is not necessarily a guide to future results. Company fundamentals and earnings may be mentioned occasionally, but should not be construed as a recommendation to buy, sell, or hold the company's stock. Predictions, forecasts, and estimates for any and all markets should not be construed as recommendations to buy, sell, or hold any security--including mutual funds, futures contracts, and exchange traded funds, or any similar instruments. The text, images, and other materials contained or displayed in this report are proprietary to Clearnomics, Inc. and constitute valuable intellectual property. All unauthorized reproduction or other use of material from Clearnomics, Inc. shall be deemed willful infringement(s) of this copyright and other proprietary and intellectual property rights, including but not limited to, rights of privacy. Clearnomics, Inc. expressly reserves all rights in connection with its intellectual property, including without limitation the right to block the transfer of its products and services and/or to track usage thereof, through electronic tracking technology, and all other lawful means, now known or hereafter devised. Clearnomics, Inc. reserves the right, without further notice, to pursue to the fullest extent allowed by the law any and all criminal and civil remedies for the violation of its rights.

Writer's pictureClay Reynolds
Oct 282 min read

How to manage an Inherited IRA

I’ve inherited an IRA… now what do I do?

Inherited IRAs can seem overwhelming when the time comes to inherit one. It seems self-explanatory when you are first listed as a beneficiary of an IRA. Upon the unfortunate passing of the owner, you inherit part or all of the IRA (depending on how many beneficiaries are listed.)

 

However, the part that gets many people confused is the moment that they are notified they are inheriting the IRA. When the rubber hits the road, and you are presented with a set of rules that come with inheriting an IRA, it can seem quite complicated. The best way to organize these rules is with two buckets: Spousal Beneficiary and Non-Spousal Beneficiary.

 

Can I roll this into my personal IRA?

This question is commonly asked or just assumed by many individuals. The answer is dependent on those two buckets mentioned. Are you a spousal beneficiary or a non-spousal beneficiary?

 

Spousal Beneficiary

If the decedent was your spouse, you can rollover the inherited IRA dollars into your personal IRA. This allows you to comingle those dollars into an existing IRA and treat those funds as your own. This gives the benefit of delaying required minimum distributions (RMDs) until you turn age 73. You can also keep it in the inherited IRA and be subject to those RMD rules (generally, you must liquidate the entire IRA by the end of the 10th year following the original account holder’s death.) Having these options as a spouse offers flexibility in how you want to liquidate the IRA to ensure you are tax efficient as possible.

 

Non-Spousal Beneficiary

If you are a non-spousal beneficiary, you must open an inherited IRA. This is a separate IRA that is exclusive for those inherited dollars. You can invest in this inherited account as you wish as it is sheltered in the IRA, meaning you will not recognize any gains by selling and buying within the account. Any distributions that are made from an inherited IRA are taxed as ordinary income.

 

This leads to the 2nd option for non-spousal beneficiaries, taking a lump-sum distribution. Lump-sum distributions can have significant tax implications as the beneficiary recognizes the distribution as taxable income. In specific circumstances, some beneficiaries may prefer a lump-sum distribution if the inherited IRA is small, and they could use the money to put on their mortgage or other loan payments. It is always important to contact your financial advisor and CPA before taking a lump-sum to ensure that you will not incur a tax burden from the distribution.

 

Conclusion

Inherited IRAs can be complicated, but the first step is accessing your options for where and how you can move the funds. Visualizing which “bucket” you fall into can offer guidance on the processes available. Contact your financial advisor if you are expecting to inherit an IRA. They can help apply the various, more complex rules to your situation to ensure you do what is best for you financially.

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Whitaker-Myers Wealth Managers is an SEC-registered investment adviser firm. The information presented is for educational purposes only and intended for a broad audience. The information does not intend to make an offer or solicitation to sell or purchase any specific securities, investments, or investment strategies. Investments involve risk and are not guaranteed. Whitaker-Myers Wealth Managers reasonably believes that this marketing does not include any false or misleading statements or omissions of facts regarding services, investment, or client experience. Whitaker-Myers Wealth Managers has a reasonable belief that the content will not cause an untrue or misleading implication regarding the adviser’s services, investments, or client experiences. Please refer to the firm’s ADV Part 2A for material risks disclosures.

​

Past performance of specific investment advice should not be relied upon without knowledge of certain circumstances of market events, the nature and timing of the investments, and relevant constraints of the investment. Whitaker-Myers Wealth Managers has presented information in a fair and balanced manner.

​

Copyright (c) 2023 Clearnomics, Inc. and Whitaker-Myers Wealth Managers, LTD. All rights reserved. The information contained herein has been obtained from sources believed to be reliable, but is not necessarily complete and its accuracy cannot be guaranteed. No representation or warranty, express or implied, is made as to the fairness, accuracy, completeness, or correctness of the information and opinions contained herein. The views and the other information provided are subject to change without notice. All reports posted on or via www.clearnomics.com or any affiliated websites, applications, or services are issued without regard to the specific investment objectives, financial situation, or particular needs of any specific recipient and are not to be construed as a solicitation or an offer to buy or sell any securities or related financial instruments. Past performance is not necessarily a guide to future results. Company fundamentals and earnings may be mentioned occasionally, but should not be construed as a recommendation to buy, sell, or hold the company's stock. Predictions, forecasts, and estimates for any and all markets should not be construed as recommendations to buy, sell, or hold any security--including mutual funds, futures contracts, and exchange traded funds, or any similar instruments. The text, images, and other materials contained or displayed in this report are proprietary to Clearnomics, Inc. and constitute valuable intellectual property. All unauthorized reproduction or other use of material from Clearnomics, Inc. shall be deemed willful infringement(s) of this copyright and other proprietary and intellectual property rights, including but not limited to, rights of privacy. Clearnomics, Inc. expressly reserves all rights in connection with its intellectual property, including without limitation the right to block the transfer of its products and services and/or to track usage thereof, through electronic tracking technology, and all other lawful means, now known or hereafter devised. Clearnomics, Inc. reserves the right, without further notice, to pursue to the fullest extent allowed by the law any and all criminal and civil remedies for the violation of its rights.

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