This week's Slott Report Mailbag looks at how a QDRO (qualified domestic relations order) works with 401(k) withdrawals and details the IRA beneficiary process. As always, we recommend you work with a competent, educated financial advisor to keep your retirement nest egg safe and secure. You can find one in your area here.
I talked to two different advisors this week who had almost the exact same story involving inherited IRAs.
A client inherited a small IRA from a parent and the kind bank employee gave them a check. Wouldn’t this make most beneficiaries happy? Not necessarily. Click to find out why.
An interesting question came up recently that went something like this… Mom died with two IRAs. She had two children, who we will call Deborah and Edward. The beneficiary of one of her IRAs was her children, 50% each. The beneficiary of the other IRA was a trust for the benefit of her children. Each child was a 50% beneficiary of the trust. Click to read more about this complicated scenario.
This week's Slott Report Mailbag looks at Roth contributions and the prerequisites necessary to make a contribution. We also answer a question on investing inherited IRA money in an IRA annuity.
This week's Slott Report Mailbag comes during an important time. The election is less than two weeks away, and we have devoted an entire week to covering the IRA, tax and retirement planning issues you care about. This week's mailbag includes questions on life insurance, using Roth IRA funds for a first-time home purchase and how to take the required minimum distribution (RMD) for a deceased parent in the year of death.
You inherited an IRA or a Roth IRA. Since you are not age 70 ½ yet, you did not think you had to take required distributions (RMDs) or maybe your advisor told you that. WRONG!!!A non-spouse beneficiary generally must take his first required distribution in the year after the account owner's death.Here are the rules for a beneficiary that is named on the beneficiary form (or is named through the document default provisions). These rules do NOT apply to beneficiaries who inherit through an estate. They may be the same for a beneficiary who inherits through a trust, but that is a way more complicated situation and you should be working with a knowledgeable advisor to determine how RMDs to the trust will be calculated.We are going to assume that you have set up a properly titled
An IRA account owner is trying to keep things simple or just does not get around to changing a beneficiary form. Only one person ends up being named on the beneficiary form. The account owner exacts a promise from that person that they will make sure that the account is split between all the children, or all the grandchildren, or all the siblings or whoever is important to the account owner. The unwitting beneficiary agrees to this since, after all, it is only fair that the account be split.
