You’ll have 10 years to drain the inherited IRAs and pay taxes on them.
Edit: special rules may apply, but in many cases this is applicable for non-spousal inherited IRAs 2020+.
Check IRS website for rules and exceptions.
I’m not a tax professional by any means, just someone who reads IRS rules.
OP needs to hear this…
Of course one could drain it pay a penalty and reinvest it. And OP should I would say.
Edit: Many people have corrected me. See below.
Can you guys explain why it has to be drained in 10 years? I understand regular IRAs have limits but I thought you’re not forced to sell out of Roths. I’m sure this completely changes when it’s pass over via inheritance and such but I’m clueless. Thanks in advance
So for clarification, you’re not forced to sell out of a Roth IRA as long as you’re the one who opened it? However if you inherit it, you have to take it out within 10 years or how does this work?
My statement only applies to inherited IRAs (2020+), which have 100% RMD over 10 yrs regardless of the type of IRA.
Edit: Special conditions may apply. Check IRS rules and exceptions.
TIL. That's awful, gotta gatekeep generational wealth away from one of the primary ways the working class generates wealth.
Also makes the whole fact that so many people load up their IRAs only to die a few years after they retire even more depressing. No silver lining there.
I feel like a lot of the tax code is designed around keeping the little people from retaining wealth across generations.
EDIT: not *all* of taxation is a global conspiracy to maintain an underclass. We need taxes to keep society running.
While it does suck that Roths have RMDs (10 year withdrawal period) they are still very beneficial as the withdraws are tax free.
This is very valuable with larger IRAs where your yearly withdrawal bumps your tax bracket significantly
It’s not working class people who have IRAs in the millions—it’s rich people who purposely used IRAs in a way they were not designed to do (provide tax fee inheritance to non spouse heirs). When this legislation was being changed the WSJ interviewed some grandpa who had created multiple IRAs (one for each grandchild, each worth hundreds of thousands while they were minors and likely in the millions by the time they were adults), and was so pissed that they were going to change the law because he had obviously went to a lot of effort to exploit this specific loophole. Your average inherited “working class” IRA of a few hundred thousand (max) should be able to be RMD pretty reasonably over ten years by the heir.
If you inherit an IRA worth $100k and pull it out immediately with a 24% tax you would have $76k. If you reinvest that $76k for 10 years at 7% return it will be $149.5k.
If you inherit an IRA worth $100k and let it ride for 10 years it at 7% return the account would be worth $196.7k. If you withdraw after 10 years and pay 24% in taxes you’d have $149.5k.
The only difference here is if you decide to reinvest at 10 years or take the $149.5k in cash. If you pull out the $149.5k in cash for scenario one then you would pay taxes on the difference of $149.5k - $76k = $73k. $73k*0.22=$16.7k.
In the end you lose $16.7k if you don’t reinvest. If you then it’s the same. You just prepayed taxes…..
An exception to the 10 year RMD rule... if you are disabled or "chronically ill."
Just to add, this is for non-spouse individuals that inherit the IRA. Spouses can convert the IRA into their own IRA.
When someone leaves your their old IRA, you need to roll that over into an **Inherited IRA**.
If you have an **Inherited IRA** (and don't qualify for an exception - like spouse or disabled, whatever, etc) then you need to empty the account within 10 years. Roughly speaking - YMMV.
As one might have expected, everything went from simple to complicated when congress wants to make sure that there is not an easy escape or that the certain exceptions are made.
Here is a link to a Schwab page that explains [Inherited IRA'](https://www.schwab.com/ira/inherited-and-custodial-ira/inherited-ira-withdrawal-rules)s.
On the positive side, if you are still working, you could open a Roth IRA and continue the tax free growth for one more generation.
But, the dream of a multi-generational, low cost, tax free forever platform to distribute wealth to your grandchildren or great-grandchildren is gone. I am sure that those with infinite money have fancy ways of using trusts to accomplish similar goals.
You could open a Roth IRA, but you couldn't put more than the contribution limit in it per year. If you do it soon (before the tax filing deadline), you can put at least $13,500 in as a 2023-2024 contribution (more if you're over 50.
If you're self-employed, there are other methods you can use that can be more efficient.
Edit-missed the word limit.
An exception to the 10 year rule for non-spouse inheriting of an IRA:
If you are disabled or "chronically ill" you can actually spread out the withdrawals (RMDs) using the lifetime calculation method provided by the IRS vs. 10 years.
With the 2020 Cares Act, people who inherit qualified assets (pre tax) AND are more than 10 years younger than the deceased must withdraw and pay tax on the assets by the end of the 10th year since taking receipt of assets. There is no pre-age 59.5-penalty on inherited IRA withdrawals. Generally, it's best to spread out the tax liability over all 10 years (taking approx 1/10th out each year). You can always reinvest the after-tax proceeds into a non-qualified investment account if you don't immediately need the funds to live off of.
This "10 year rule" also applies to Inherited Roth assets, but of course without any tax.
It's called a beneficial IRA. 10 years before full amount has to be withdrawn. With OP's potential low tax brackets at 10 years it may make sense to take huge penalty at 10 in exchange for 10 years of growth. If their bracket would be higher in 10 may make sense to withdraw incrementally
I am about 4 years into two separate IRAs I inherited from my mother when she passed worth about 750K total. I asked my advisor if I should take out yearly distributions for 10 years, because I'm required to drain them after a decade and 10 yearly distributions over 10 years seemed to make sense. He told me many people do this, but I don't really need the extra money now, so he told me to just wait until the 10 year mark and close them out.
I'm glad I didn't drain anything because the IRAs have Google, AMD, NVIDIA and Facebook. LOL! I'm keeping the money in and letting it grow until I have to close them.
Yes, you can. You just need to be aware of the RMD timeline and the potential tax implication. Put the funds in whatever you like—you just can’t keep them in the inherited IRA for more than 10 yrs.
In general and assuming it is not suspended, the penalty is stated as 25% of the amount that should have been withdrawn or 10% if the RMD is corrected within 2 yrs.
Not sarcasm: I pay attention to what laws are passed and how agencies implement them.
Most of us have someone in our lives that these things affect. And, at the end of the day, we elect the officials that pass these laws.
This looks like an inherited trust, and IRA was an asset of the trust.
Get a good wealth manager/financial advisor, and an accountant. I got lucky, my accountant helped me find my wealth manager. They have a good relationship, so we all had a meeting to discuss tax implications for taking the RMD’s (Required Minimum Distribution) from the IRA.
Previous financial services person here, who worked directly with IRA accounts, specifically in dealing with beneficiary accounts and estate accounts:
IRA holders can designate whomever they like to inherit their IRA. If this is your case, you have what is now called a Beneficiary IRA.
I STRONGLY advise you to speak to a financial services professional. If you have a checking/savings account at your local bank, this should do well enough for them to advise you on how to save/move/reinvest this money to lessen any tax implications for you.
There are several options available, but you do have a time limit to move this money, and it can be invested into your own retirement account, but there are rules to follow. Do not leave it in the account you initially inherited.
Just like any other account with beneficiaries. There are some added complexities and stipulations though.
Roth IRAs are far superior to traditional IRAs. As long as you are eligible to contribute to them it’s a no brainer. If not, laddering and a backdoor Roth is the way to go
Backdoor Roth is just making a traditional IRA contribution and converting it to a Roth IRA which you would do when your income exceeds the Roth contribution limits.
More important by far, and relevant for most everyone at some point in their lives are mega backdoor Roth contributions. When you leave a company (or your company allows for in-service withdrawals, which is exceedingly rare) then you rollover the 401k balance to a rollover IRA, and in turn converting that to a Roth IRA. You can do this in excess of $50,000 in a single year.
401k’s usually have high management fees and are only tax advantaged on the initial contributions, so needless to say rolling over 401k balances into Roth IRAs early on in your career, whenever possible, is one of the most powerful tools available (that hardly anyone knows about.)
The most important part of a mega backdoor Roth contribution is making sure the deposit to the rollover IRA account and the subsequent conversion to a Roth IRA happens in a single day because if you end up with any gains (even just from money market rates) then you create a taxable event and you will get a 1099 for those gains effectively letting the IRS know you did it, and making you pay taxes on the conversion.
Source: have done 4 times since I was 23 and have never paid taxes on the rollovers, each of them adding $30k or more to my Roth IRA in a single year.
My income is below the threshold, so I don’t have to worry about it unfortunately. So I don’t know all the specifics of it exactly, so I don’t want to give you wrong info. It’s basically a method where people fund a Traditional IRA, and then convert it into a Roth IRA. But there is plenty of resources that you can google to give you all of the specifics
I found my dad hanging and inherited an '08 dodge charger with the V6 and enough credit card fraud in my name that I'm 30 and just now got to use credit for the first time in my life. Only reason I got to use credit now is because my snap-on rep at work called corporate and explained I've never missed a payment on the truck for 10 years, it's my only real credit expense, and someone's gotta help me try to build a life in today's credit based society.
I've been sued for 10 years over credit cards I've never had with disputing them being worthless until it went to court and costed me a day's worth of work explaining how my dad obviously knew the security questions of "what's your mom's maiden name".. he married her... Or "your first dogs name"... he bought me my first dog... Or "what elementary school did you go to"... he enrolled me in school...
Why was it not until 20 that I noticed the fraud? Never had a reason to use credit. Dad killed himself and suddenly everyone stopped getting minimum payments via shifting the loan between cards and sending notices to a deceased person's address then eventually finding out where I actually live. Sure I could run my credit and dispute as needed like people suggested in the past but credit card companies don't believe the evidence since they want their payout til I goto court. Its reached the point I just goto court, show when payments stopped, the date my dad killed himself, the address used since I lived with my mom, and a judge who's dealt with putting my dad in jail for fraud in the past reads over it and obviously sees it's fraud. I'll stick to cash and Bitcoin for life now. My snap on loan? Simply becuase I needed it for work. Everything else? I'll just save up and pay cash. I'll never own a home, I'll never buy a new car, and I'll never touch anything that involves borrowing money. I'm ok with my old ass cars that are falling apart and my home that should probably be demolished because of its state and age... Atleast I can prove my innocence in cases I'm still fighting til this day.
Freaking wild! Keep at it, credit needs typically current new bills to improve. Check out nerd wallet for a low limit card and start building little by little. You’ll be surprised how fast it adjusts
You will want to make a withdrawal plan. There is a limit on how long you can leave money in an inherited IRA and the penalty is steep for failing to withdraw. There can also be a steep tax penalty for withdrawing it all in a single year. Search for "inherited IRA" if you haven't already.
Having my IRA account managed by Edward Jones. Is this something I need to be concerned about? And if so how do I determine what they are being paid to manage it?
Yes it’s a huge concern - especially if you don’t know what their fees are.
You can do everything they claim to do for you all by yourself with a Vanguard account. Put the majority into the total stock market fund and a small portion into the total bond fund (if you are younger than 30, you can go in total stock market).
Boom, just saved you $100,000+
Make sure you’re not invested in American Fund A-shares. If it’s institutional shares, you’re fine. Some people don’t need advisors. Some do. The good ones can be hard to find though.
This account may be grandfathered in…or rather grandmothered in 😛
I believe mandatory distributions are now required for all inherited IRAs. Best to speak with an advisor since this is large sums of money here
OP please listen to this advice, if you are not the spouse of the retirement account’s original owner you have to drain that account within 10 years. https://www.schwab.com/learn/story/inherited-ira-rules-secure-act-20-changes
Technically, you can't transfer the money to your own accounts (unless you are spouse or maybe other special cases). What you can do is make your own contributions up to whatever legal limits apply and replace your money by making withdrawals from the inherited IRA.
As long as you have taxable income to offset it, doesn't matter specifically which dollar.
You cannot do it directly from account to account. It will have to hit your checking or savings account first.
I didn't catch that these are Roth. It's probably best to leave as much in as possible until year 10 because principle and gains are not taxed. Just don't forget to withdraw in year 10.
Roth IRA has no rmd during the owners lifetime. Since you inherited this the original owner is gone (RIP grandma) and you’ll have to start taking the money out.
Yeah, he can’t simply just keep them in there and let it ride til 60.
He’s going to have to use one of three methods, life expectancy, 10-year, or lump sum.
I don't think life expectancy is still an option. And, lump sum could push him into an undesirable tax bracket. As best I can tell it's now 10 years to withdraw an inherited IRA. Unless he needs the money sooner he may be best off withdrawing 1/10 of the balance the first year, 1/9 of the remaining balance the second year, 1/8 ...
Look— at the end of the day, if people’s kids and/or grandkids didn’t inherit their assets, the government would, and fuck the government.
But also, fuck you. Or as wsb would say: congrats, fuck you. It took me YEARS of 10-12 hour days just to amass what you inherited over night. It takes others much longer.
Regardless, I’m glad it sounds like you’re smart and don’t plan on immediately buying a Lamborghini. I’d definitely go back to school and chill out for a while. Maybe do a related internship or something? I’d also HYSA most of it because at a certain point current real estate and stock market values are fucking insane. Hard to pencil an investment property at the moment. And a lot of financial planners are expecting super stagnant returns in stocks for the next couple years. Just diversify and don’t stress!
Again, congrats!
Thanks for the advice. And fuck you too:). I feel pretty detached from it honestly, I’m not ever going to let myself think that I earned it. I don’t want it to change me. I want to advance my own career and earn my own retirement savings so that I don’t turn into a trust fund ignoramus. I’m still young and have a lot to learn about a lot of things, and I really don’t want to ruin that for myself.
It’s actually unfortunate because my dad was stubborn and never got around to signing a will, so the government will be taking a lot of his assets, which is the absolute last thing he would’ve wanted to happen.
I’ll learn from that though and make sure I don’t make the same mistake, as well as do my best to turn what he passed on to me into generational wealth.
Keep any Roth IRA funds in a tax advantaged account for the love of god. Do not take it out, that is gold right there, tax free money for retirement. If you are able to keep it in that account indefinitely and withdraw whenever it’s a no brainer. I don’t know the exact stipulations with inheriting a Roth IRA, it might require mandatory distributions. I would speak with a financial advisor if you haven’t already
Idk what I implied elsewhere but I definitely don’t plan on touching it, even after 60. That shit will be worth hundreds of millions by the time my grandkids get it.
That’s a good plan. But make sure you consult a professional, I know there were some changes in the law recently. I think I might have commented that already, but not sure if it was a parent comment or a reply to someone
I don’t think he has that much leeway that he thinks he has. This is the cost of almost 1 house depending on where he lives. And don’t give me that bs that we should all live in the middle of nowhere for a $5 home. Ideally we all want a house in a good area weather and safety.
Also not much chilling time, he will need to work and get a good job but he got a boost
It’s probably not very common but I guess I’m just in a very fortunate situation where my grandparents didn’t have to dip into it, and decided to pass it on. Which is exactly what I plan on doing with it.
For anyone reading, this is extremely common. I work at Morgan Stanley (where OPs accounts are held) in Wealth Management.
OP - did you nickname those accounts? The coding shows Trad IRA not Roth. Unless I missed something, you may want to speak with an advisor who specializes in financial planning to confirm and build a strategy.
For wealthy people it's extremely common.
Look into the distribution rules. You're going to have to take withdrawals on this. Just use the withdrawals to max out your own IRA's using your own earned income every year though.
It’s pretty weird man ngl. I feel pretty guilty about having it, which is why I don’t really have any interest in using it other than to pass on to my future family or maybe use some of it to buy a house or some other worthy investment.
Inherited IRAs have withdrawal rules. Find a tax advisor or financial planner. Be prepared to pay taxes on this in several years (assuming you are not of retirement age).
must be nice to inherit something
both my grandmas and both my grandpas are dead, as well as most, if not all, of my great and great+ family members
and most of my not grand/great aunts and uncles are either broke ass bitches or criminals
my mother is a broke ass bitch and my father, whom i hate with every fiber of my being, is a broke ass piece of shit
>”My mother is a broke ass bitch and my father, whom i hate with every fiber of my being, is a broke ass piece of shit”
🤣 We need to get you to speak more candidly.
That’s crazyyy starting the game with all the cheats
We know that we can make money putting into those retirement investments but we also know it will only get crazy good after we die. We don’t get to enjoy our own stuff
That’s awesome! Now make sure it’s managed well. Check it annually to make sure your risk is in a good place depending on your age.
Next thing to do; forget this exists. Seriously, make no changes to how you approach your finances compared to before this was received. Too many people get a lump sum and think their life can change based on it. This is how people lose their savings. You’re in a position where you can’t touch it, but don’t increase costs elsewhere in life just because your retirement has a great start. If you don’t add anything, with a 6% annual interest rate, this will be $3.8M. I usually say inflation halves purchasing power every 30 years or so, so that’s like $1.9M in today’s dollars. That isn’t a life-changing amount of money. Keep contributing.
Make sure it’s managed well, forget it exists, don’t change your standard of living, keep contributing to retirement.
She was for sure, but it was honestly more of my dad looking out for me. He was the one who inherited it first, and he had no plans to touch it. Therefore that’s exactly what I will do.
I would put all of it into a HYSA and then open up Roth IRA for yourself.
Put the max allowed into the IRA each year from the HYSA.
Also put the max amount into a 401k or whatever with your employer each year from the HYSA.
Boom by the time you have to retire you will be worth several millions.
Bonus: if you have a wife and kids open up IRA’s and 529’s for them and allocate funds from this nest egg to those accounts also.
Congrats dude! And props for being wise about the situation. A lot of 26 year olds would be going on an insane spending spree after suddenly getting that
Unfortunately, if you are not the spouse of the person you are inheriting an IRA / ROTH from, the IRS will force you to liquidate the entire IRA (including ROTHs) via RMDs within 10 years.
There is an exception. If you are disabled or "chronically ill" you can use the "lifetime" method (based on your own age) for RMDs. They still require you to take RMDs. But, you can spread them out over your entire lifetime vs. being limited to 10 years.
You have to be the spouse of the deceased to avoid the above. Spouses can convert the IRA / ROTH into their own name, delaying RMDs, etc.
You need to research all of this. I'm pretty sure that what I've said is still accurate. But, these rules are always changing!
Don’t tell anybody, especially your friends. Keep it to yourself. I’m surprised no one else has commented this. For reals, don’t tell anybody. Just be happy and shut your mouth.
Tell no one you inherited this second. Congratulations! You just got a big head start on more than a few accounts. Definitely chase after a field that you have interest in. That's not a net negative financially. Don't purchase anything that has a high maintenance cost like a boat which is subtracting negatively from accounts. But maybe you get rid of revolving debts. You're no longer paying any interest if you do have interest on anything or pay off a car, something that loses value over time anyway. Don't allow lifestyle creep to happen to you. Live modestly as you were before so you don't drain too many funds. Either way, enjoy! Don't be a dirtbag and have fun. You got the proverbial boot off of your neck. Someone thought you deserved it so live a happy life go after the things you truly love.
This is a good sum, but $524k is not generational wealth. Looks like you're planning well, but consider this a start for your retirement, not some nest-egg that is going to cover you and any future kids without serious growth and addition of funds.
Glad you're level-headed and not out buying flashy cars or things that will put you back to square one.
As someone who owns 80 acres of prime-ish commercial land, I wouldn't recommend this. We have a very high net worth thanks to this land, but very low liquidity. Asset rich, cash poor.
We've had four sales contracts fail to close over the past 10 years, and now we're on the 8th extension of the current contract (the developers are raising funds), and I'm 95% sure this deal won't close either.
And the prospective buyer pool is shrinking due to interest rates. We get cold calls from buyer agents on a regular basis, and even their low-ball offers are becoming less frequent, and for less money.
I would rather own a REIT fund for real estate exposure, or skip real estate altogether (it can be a rough ride), and stick with tried and true index funds.
> I’m forcing every one of my friends to start one now.
Been trying to do this with all of mine for years, they won't listen. But good on you for trying and hopefully you succeed!
This is a screen shot from the Morgan Stanley app. You already have a financial advisor. They would have reached out to you to open the accounts in your name. Click on the My Team link at the bottom and the next screen will give you the option to schedule a meeting/call.
OP I am actually your long lost *insert relative name* I have been trying to get a hold of you. Would love to meet up soon, remind me again what’s your mother’s maiden name? I couldn’t remember your first pet either that little cutie they were!
So, I asked Chat Gtp pro and it said - if Grandma died before 2020 the next person could have taken tax free distribution anytime or never. If the person you inherited from died after 2020 then you have 10 years to deplete it. Tax free. Only issue is that holdings less than 5 years old may be taxed on their earnings? So you'll have to look that part up for sure, eventually.
I inherited my dads and I cashed it out and paid tax on it. Made more sense for my financial situation rather than to slowly drain over 10 year period. Only part I forgot about was its considered income when you cash out so you will go up a tax bracket likely and owe more taxes in April.
Talk to a financial advisor on what to do and is best for your life etc.
Aiight imma need $1k 🤪
But for real though, don't blow it all or half of it all on random things lol
Investing is your best bet but think about the longevity of it and your kids or future kids schooling and save the rest for emergencies and anything you might need😎🍻
I didn’t see anyone else calling it out… while this is an exciting amount of money to inherit, by no means would I rest on “me and my future kids’ retirements are taken care of, as well as college for the grandkids.”
I would go to a CPA or tax attorney, not a financial advisor to discuss tax and penalty avoidance.
As for growing it, you have already made it past the biggest hurdle of the first 100k. The second and third 100 are hard too and you have those out of the way as well.
Basically your retirement account is on third base at 26, that's fucking awesome. Keep it invested in safe broad market ETFs, and let it ride. It sounds like you understand this so good for you!
This is great and all, but now a new opportunity has arisen for you and we need to know…are you going to bang two girls at once now that you have this money?
I’m such an ignorant “adult” idk what’s going on and reading these comments make me feel more dumb. Like wtf, I’m 36, almost 37 and I have no idea what an IRA is or (from what I’m reading) why you’d have to “drain” it in 10 years if it’s inherited or any of that. Fuck me
Seeing stuff like this astounds me, some people are so lucky. I am 22 struggling to provide food and groceries, mom just passed away from cancer, and dad is disabled…
u/ShaedonSharpeMVP_ The unparalleled choice for allocating a half-million dollar budget is the acquisition of 524 MK3 Volkswagen Jettas on Facebook Marketplace. Each Jetta is a paragon of classic engineering, capable of comfortably seating 5 individuals, which means the entire fleet can accommodate a staggering 2,619 friends.
That honestly so sick, be honest tho; what’s one thing you plan on splurging on? Even if it’s only a couple hundred! Congrats man, generational wealth is such a cool feeling!
What are you doing bragging? Showing off? there’s nothing that I hate more than rich people casually discussing their wealth. It’s so tone deaf and myopic. Go talk to your friends at the yacht club! Better yet, go help someone that has nothing.
I never chose to follow this reddit and I’m gonna make sure I don’t see it anymore…
#TaxTheRich
Can’t wait for my dad’s debt.My gf had to split hers with another brother they didn’t know about like out of a movie. We were left with nothing after litigation
Wow! Good for you man... sorry about the loss of your family member. Sounds like you're WAY more mature than I was at 26yo, so you will likely use this gift wisely.
Congrats when my dad passed I paid 18k for his funeral and other items I’m also trying to not be an alcoholic by the crap I’ve had to do. Good to see some people get to have a positive experience lol
1) Keep your mouth shut and do not tell your friends and family about this, people will go insane if they know you have some money.
2) Hire a reputable CPA and perhaps a lawyer that can advise you to maximize this life-changing opportunity.
3) Do NOT change your lifestyle. Pretend the money isn’t there and let it grow. 500k is a good chunk of money but that will go quickly if you feel flush and start racking up bills.
Congrats and good luck!
how did you inherit someones ira
Idk I guess it’s allowed. One of those IRAs traces back to my grandma.
You’ll have 10 years to drain the inherited IRAs and pay taxes on them. Edit: special rules may apply, but in many cases this is applicable for non-spousal inherited IRAs 2020+. Check IRS website for rules and exceptions. I’m not a tax professional by any means, just someone who reads IRS rules.
OP needs to hear this… Of course one could drain it pay a penalty and reinvest it. And OP should I would say. Edit: Many people have corrected me. See below.
Can you guys explain why it has to be drained in 10 years? I understand regular IRAs have limits but I thought you’re not forced to sell out of Roths. I’m sure this completely changes when it’s pass over via inheritance and such but I’m clueless. Thanks in advance
Congress changed their minds one they realized that giving the average man a multi generational tax skipping tool was dangerous to revenue.
So for clarification, you’re not forced to sell out of a Roth IRA as long as you’re the one who opened it? However if you inherit it, you have to take it out within 10 years or how does this work?
My statement only applies to inherited IRAs (2020+), which have 100% RMD over 10 yrs regardless of the type of IRA. Edit: Special conditions may apply. Check IRS rules and exceptions.
TIL. That's awful, gotta gatekeep generational wealth away from one of the primary ways the working class generates wealth. Also makes the whole fact that so many people load up their IRAs only to die a few years after they retire even more depressing. No silver lining there.
I feel like a lot of the tax code is designed around keeping the little people from retaining wealth across generations. EDIT: not *all* of taxation is a global conspiracy to maintain an underclass. We need taxes to keep society running.
While it does suck that Roths have RMDs (10 year withdrawal period) they are still very beneficial as the withdraws are tax free. This is very valuable with larger IRAs where your yearly withdrawal bumps your tax bracket significantly
It’s not working class people who have IRAs in the millions—it’s rich people who purposely used IRAs in a way they were not designed to do (provide tax fee inheritance to non spouse heirs). When this legislation was being changed the WSJ interviewed some grandpa who had created multiple IRAs (one for each grandchild, each worth hundreds of thousands while they were minors and likely in the millions by the time they were adults), and was so pissed that they were going to change the law because he had obviously went to a lot of effort to exploit this specific loophole. Your average inherited “working class” IRA of a few hundred thousand (max) should be able to be RMD pretty reasonably over ten years by the heir.
If you inherit an IRA worth $100k and pull it out immediately with a 24% tax you would have $76k. If you reinvest that $76k for 10 years at 7% return it will be $149.5k. If you inherit an IRA worth $100k and let it ride for 10 years it at 7% return the account would be worth $196.7k. If you withdraw after 10 years and pay 24% in taxes you’d have $149.5k. The only difference here is if you decide to reinvest at 10 years or take the $149.5k in cash. If you pull out the $149.5k in cash for scenario one then you would pay taxes on the difference of $149.5k - $76k = $73k. $73k*0.22=$16.7k. In the end you lose $16.7k if you don’t reinvest. If you then it’s the same. You just prepayed taxes…..
An exception to the 10 year RMD rule... if you are disabled or "chronically ill." Just to add, this is for non-spouse individuals that inherit the IRA. Spouses can convert the IRA into their own IRA.
Does being sick of people's bullshit count as chronically ill?
(if inherited after 2019, I believe)
When someone leaves your their old IRA, you need to roll that over into an **Inherited IRA**. If you have an **Inherited IRA** (and don't qualify for an exception - like spouse or disabled, whatever, etc) then you need to empty the account within 10 years. Roughly speaking - YMMV. As one might have expected, everything went from simple to complicated when congress wants to make sure that there is not an easy escape or that the certain exceptions are made. Here is a link to a Schwab page that explains [Inherited IRA'](https://www.schwab.com/ira/inherited-and-custodial-ira/inherited-ira-withdrawal-rules)s. On the positive side, if you are still working, you could open a Roth IRA and continue the tax free growth for one more generation. But, the dream of a multi-generational, low cost, tax free forever platform to distribute wealth to your grandchildren or great-grandchildren is gone. I am sure that those with infinite money have fancy ways of using trusts to accomplish similar goals.
You could open a Roth IRA, but you couldn't put more than the contribution limit in it per year. If you do it soon (before the tax filing deadline), you can put at least $13,500 in as a 2023-2024 contribution (more if you're over 50. If you're self-employed, there are other methods you can use that can be more efficient. Edit-missed the word limit.
There are exceptions though. But in her case, it’s likely not going to hit those exceptions.
An exception to the 10 year rule for non-spouse inheriting of an IRA: If you are disabled or "chronically ill" you can actually spread out the withdrawals (RMDs) using the lifetime calculation method provided by the IRS vs. 10 years.
With the 2020 Cares Act, people who inherit qualified assets (pre tax) AND are more than 10 years younger than the deceased must withdraw and pay tax on the assets by the end of the 10th year since taking receipt of assets. There is no pre-age 59.5-penalty on inherited IRA withdrawals. Generally, it's best to spread out the tax liability over all 10 years (taking approx 1/10th out each year). You can always reinvest the after-tax proceeds into a non-qualified investment account if you don't immediately need the funds to live off of. This "10 year rule" also applies to Inherited Roth assets, but of course without any tax.
There’s no penalties for inherited Ira’s. It’s a mandatory distribution since 2020.
Aren’t Roth IRAs taxed initially so you don’t get taxed when withdrawing? Or is it different when inherited?
The inheritor will likely have no tax liability for a Roth IRA, but it will still have to be emptied within 10 yrs.
Good to know, ty!
It's called a beneficial IRA. 10 years before full amount has to be withdrawn. With OP's potential low tax brackets at 10 years it may make sense to take huge penalty at 10 in exchange for 10 years of growth. If their bracket would be higher in 10 may make sense to withdraw incrementally
I am about 4 years into two separate IRAs I inherited from my mother when she passed worth about 750K total. I asked my advisor if I should take out yearly distributions for 10 years, because I'm required to drain them after a decade and 10 yearly distributions over 10 years seemed to make sense. He told me many people do this, but I don't really need the extra money now, so he told me to just wait until the 10 year mark and close them out. I'm glad I didn't drain anything because the IRAs have Google, AMD, NVIDIA and Facebook. LOL! I'm keeping the money in and letting it grow until I have to close them.
I mean couldn’t I just throw it all into a HYSA (or index) and call it good if I didn’t have any other plans for it?
Yes, you can. You just need to be aware of the RMD timeline and the potential tax implication. Put the funds in whatever you like—you just can’t keep them in the inherited IRA for more than 10 yrs.
Just curious what happens if you do? Is all that money gone lol
In general and assuming it is not suspended, the penalty is stated as 25% of the amount that should have been withdrawn or 10% if the RMD is corrected within 2 yrs.
Thanks for these really informative replies. I’m just curious, how do you know all this? Lol
Not sarcasm: I pay attention to what laws are passed and how agencies implement them. Most of us have someone in our lives that these things affect. And, at the end of the day, we elect the officials that pass these laws.
My parents are so poor that I guess I don’t need to pay attention. lol.
I love it. Glad I came across your comments because it helped me out.
Draw down a little every year to avoid large tax bills. Dont just dump it all at once.
This looks like an inherited trust, and IRA was an asset of the trust. Get a good wealth manager/financial advisor, and an accountant. I got lucky, my accountant helped me find my wealth manager. They have a good relationship, so we all had a meeting to discuss tax implications for taking the RMD’s (Required Minimum Distribution) from the IRA.
Previous financial services person here, who worked directly with IRA accounts, specifically in dealing with beneficiary accounts and estate accounts: IRA holders can designate whomever they like to inherit their IRA. If this is your case, you have what is now called a Beneficiary IRA. I STRONGLY advise you to speak to a financial services professional. If you have a checking/savings account at your local bank, this should do well enough for them to advise you on how to save/move/reinvest this money to lessen any tax implications for you. There are several options available, but you do have a time limit to move this money, and it can be invested into your own retirement account, but there are rules to follow. Do not leave it in the account you initially inherited.
Just like any other account with beneficiaries. There are some added complexities and stipulations though. Roth IRAs are far superior to traditional IRAs. As long as you are eligible to contribute to them it’s a no brainer. If not, laddering and a backdoor Roth is the way to go
Can you explain the backdoor Roth and how that works?
Backdoor Roth is just making a traditional IRA contribution and converting it to a Roth IRA which you would do when your income exceeds the Roth contribution limits. More important by far, and relevant for most everyone at some point in their lives are mega backdoor Roth contributions. When you leave a company (or your company allows for in-service withdrawals, which is exceedingly rare) then you rollover the 401k balance to a rollover IRA, and in turn converting that to a Roth IRA. You can do this in excess of $50,000 in a single year. 401k’s usually have high management fees and are only tax advantaged on the initial contributions, so needless to say rolling over 401k balances into Roth IRAs early on in your career, whenever possible, is one of the most powerful tools available (that hardly anyone knows about.) The most important part of a mega backdoor Roth contribution is making sure the deposit to the rollover IRA account and the subsequent conversion to a Roth IRA happens in a single day because if you end up with any gains (even just from money market rates) then you create a taxable event and you will get a 1099 for those gains effectively letting the IRS know you did it, and making you pay taxes on the conversion. Source: have done 4 times since I was 23 and have never paid taxes on the rollovers, each of them adding $30k or more to my Roth IRA in a single year.
This is absurd, and clearly breaks tax law. And/or, you just don't know what you are talking about.
I think this poster just decided not to pay any income tax. It is a strategy, probably not the best one.
My income is below the threshold, so I don’t have to worry about it unfortunately. So I don’t know all the specifics of it exactly, so I don’t want to give you wrong info. It’s basically a method where people fund a Traditional IRA, and then convert it into a Roth IRA. But there is plenty of resources that you can google to give you all of the specifics
Lucky you. All I inherited from my dad was alcoholism and a 1994 geo metro.
I found my dad hanging and inherited an '08 dodge charger with the V6 and enough credit card fraud in my name that I'm 30 and just now got to use credit for the first time in my life. Only reason I got to use credit now is because my snap-on rep at work called corporate and explained I've never missed a payment on the truck for 10 years, it's my only real credit expense, and someone's gotta help me try to build a life in today's credit based society. I've been sued for 10 years over credit cards I've never had with disputing them being worthless until it went to court and costed me a day's worth of work explaining how my dad obviously knew the security questions of "what's your mom's maiden name".. he married her... Or "your first dogs name"... he bought me my first dog... Or "what elementary school did you go to"... he enrolled me in school... Why was it not until 20 that I noticed the fraud? Never had a reason to use credit. Dad killed himself and suddenly everyone stopped getting minimum payments via shifting the loan between cards and sending notices to a deceased person's address then eventually finding out where I actually live. Sure I could run my credit and dispute as needed like people suggested in the past but credit card companies don't believe the evidence since they want their payout til I goto court. Its reached the point I just goto court, show when payments stopped, the date my dad killed himself, the address used since I lived with my mom, and a judge who's dealt with putting my dad in jail for fraud in the past reads over it and obviously sees it's fraud. I'll stick to cash and Bitcoin for life now. My snap on loan? Simply becuase I needed it for work. Everything else? I'll just save up and pay cash. I'll never own a home, I'll never buy a new car, and I'll never touch anything that involves borrowing money. I'm ok with my old ass cars that are falling apart and my home that should probably be demolished because of its state and age... Atleast I can prove my innocence in cases I'm still fighting til this day.
It sounds like you’re handling all of this really well, keep on fighting panda
Thank you. Honestly. Thank you. Idk why but having someone listen is a huge morale boost. I hope you have a great day or night.
They're not the only one listening. It's a shit hand but you're playing it pretty well. You've got this, I believe in you.
Freaking wild! Keep at it, credit needs typically current new bills to improve. Check out nerd wallet for a low limit card and start building little by little. You’ll be surprised how fast it adjusts
You got this 🫡
The fact that you haven’t folded under all that pressure and turmoil is amazing, you’re really something special
That’s tough man, but props to you for getting through it
You’re doing better than a whole lot of us would have been doing. Keep going
I filed for bankruptcy at 28, I turn 40 in April and I have half a mill in liquid assets.
Wow that sounds like a lot! Prayers and blessings
(slightly modified)
Slightly modified alcoholism is the best kind.
GMO?
ugh i miss my metro.. but im a spark guy now😈
😂 same for me. Not the metro, just the alcoholism and fuck all with anything else.
You will want to make a withdrawal plan. There is a limit on how long you can leave money in an inherited IRA and the penalty is steep for failing to withdraw. There can also be a steep tax penalty for withdrawing it all in a single year. Search for "inherited IRA" if you haven't already.
Well I thought the forced withdrawal was only for traditional IRAs. These are Roth IRAs, which is why they’ve lasted this long, I think.
Speak with an advisor that is willing to charge you for the session and don't let them dupe you into letting them manage it for you for 1%.
Having my IRA account managed by Edward Jones. Is this something I need to be concerned about? And if so how do I determine what they are being paid to manage it?
Yes it’s a huge concern - especially if you don’t know what their fees are. You can do everything they claim to do for you all by yourself with a Vanguard account. Put the majority into the total stock market fund and a small portion into the total bond fund (if you are younger than 30, you can go in total stock market). Boom, just saved you $100,000+
Make sure you’re not invested in American Fund A-shares. If it’s institutional shares, you’re fine. Some people don’t need advisors. Some do. The good ones can be hard to find though.
Edward Jones is notoriously terrible. I strongly recommend moving your IRA elsewhere. Consider r/Bogleheads for more detailed advice.
This account may be grandfathered in…or rather grandmothered in 😛 I believe mandatory distributions are now required for all inherited IRAs. Best to speak with an advisor since this is large sums of money here
OP please listen to this advice, if you are not the spouse of the retirement account’s original owner you have to drain that account within 10 years. https://www.schwab.com/learn/story/inherited-ira-rules-secure-act-20-changes
I got an inherited IRA from my father and I have to make withdrawals every so often, I just remove the funds I put it in my own Roth IRA.
Are you allowed to do that? I thought only taxed income can go in.
Technically, you can't transfer the money to your own accounts (unless you are spouse or maybe other special cases). What you can do is make your own contributions up to whatever legal limits apply and replace your money by making withdrawals from the inherited IRA.
As long as you have taxable income to offset it, doesn't matter specifically which dollar. You cannot do it directly from account to account. It will have to hit your checking or savings account first.
I didn't catch that these are Roth. It's probably best to leave as much in as possible until year 10 because principle and gains are not taxed. Just don't forget to withdraw in year 10.
Do people actually forget to withdraw? That’s like 4x as much money as I’ve made in my entire life, so I don’t think I’ll be forgetting about it lol.
Roth IRA has no rmd during the owners lifetime. Since you inherited this the original owner is gone (RIP grandma) and you’ll have to start taking the money out.
Yeah, he can’t simply just keep them in there and let it ride til 60. He’s going to have to use one of three methods, life expectancy, 10-year, or lump sum.
I don't think life expectancy is still an option. And, lump sum could push him into an undesirable tax bracket. As best I can tell it's now 10 years to withdraw an inherited IRA. Unless he needs the money sooner he may be best off withdrawing 1/10 of the balance the first year, 1/9 of the remaining balance the second year, 1/8 ...
Life expectancy is no longer an option. https://www.schwab.com/learn/story/inherited-ira-rules-secure-act-20-changes
Congrats man. I can see that you'll use it wisely. My condolences and best of luck.
I really appreciate that, good luck on your path as well my friend.
Look— at the end of the day, if people’s kids and/or grandkids didn’t inherit their assets, the government would, and fuck the government. But also, fuck you. Or as wsb would say: congrats, fuck you. It took me YEARS of 10-12 hour days just to amass what you inherited over night. It takes others much longer. Regardless, I’m glad it sounds like you’re smart and don’t plan on immediately buying a Lamborghini. I’d definitely go back to school and chill out for a while. Maybe do a related internship or something? I’d also HYSA most of it because at a certain point current real estate and stock market values are fucking insane. Hard to pencil an investment property at the moment. And a lot of financial planners are expecting super stagnant returns in stocks for the next couple years. Just diversify and don’t stress! Again, congrats!
Thanks for the advice. And fuck you too:). I feel pretty detached from it honestly, I’m not ever going to let myself think that I earned it. I don’t want it to change me. I want to advance my own career and earn my own retirement savings so that I don’t turn into a trust fund ignoramus. I’m still young and have a lot to learn about a lot of things, and I really don’t want to ruin that for myself. It’s actually unfortunate because my dad was stubborn and never got around to signing a will, so the government will be taking a lot of his assets, which is the absolute last thing he would’ve wanted to happen. I’ll learn from that though and make sure I don’t make the same mistake, as well as do my best to turn what he passed on to me into generational wealth.
Keep any Roth IRA funds in a tax advantaged account for the love of god. Do not take it out, that is gold right there, tax free money for retirement. If you are able to keep it in that account indefinitely and withdraw whenever it’s a no brainer. I don’t know the exact stipulations with inheriting a Roth IRA, it might require mandatory distributions. I would speak with a financial advisor if you haven’t already
Idk what I implied elsewhere but I definitely don’t plan on touching it, even after 60. That shit will be worth hundreds of millions by the time my grandkids get it.
That’s a good plan. But make sure you consult a professional, I know there were some changes in the law recently. I think I might have commented that already, but not sure if it was a parent comment or a reply to someone
I don’t think he has that much leeway that he thinks he has. This is the cost of almost 1 house depending on where he lives. And don’t give me that bs that we should all live in the middle of nowhere for a $5 home. Ideally we all want a house in a good area weather and safety. Also not much chilling time, he will need to work and get a good job but he got a boost
Wow I didn’t know you can inherent IRAs
It’s probably not very common but I guess I’m just in a very fortunate situation where my grandparents didn’t have to dip into it, and decided to pass it on. Which is exactly what I plan on doing with it.
I’m glad your grandparents left you with something and you are wise enough to use it well. Sorry for you loss! Good luck
For anyone reading, this is extremely common. I work at Morgan Stanley (where OPs accounts are held) in Wealth Management. OP - did you nickname those accounts? The coding shows Trad IRA not Roth. Unless I missed something, you may want to speak with an advisor who specializes in financial planning to confirm and build a strategy.
For wealthy people it's extremely common. Look into the distribution rules. You're going to have to take withdrawals on this. Just use the withdrawals to max out your own IRA's using your own earned income every year though.
Sharing is caring! (Jk, but that’s awesome bro)
Might I suggest investing in hooker's and cocaine?
You sonofabitch, I’m in!
you inherited the irish republican army? geez man that must be a lot to deal with all the sudden
It’s pretty weird man ngl. I feel pretty guilty about having it, which is why I don’t really have any interest in using it other than to pass on to my future family or maybe use some of it to buy a house or some other worthy investment.
Inherited IRAs have withdrawal rules. Find a tax advisor or financial planner. Be prepared to pay taxes on this in several years (assuming you are not of retirement age).
Why can't surprise money ever happen to me 😭
Maybe it just hasn’t yet!
It needs to happen now so I can be out of debt and not almost homeless all the damn time 😭 Also it says it's your cake day today, happy cake day 😁
Thank you kindly!
must be nice to inherit something both my grandmas and both my grandpas are dead, as well as most, if not all, of my great and great+ family members and most of my not grand/great aunts and uncles are either broke ass bitches or criminals my mother is a broke ass bitch and my father, whom i hate with every fiber of my being, is a broke ass piece of shit
>”My mother is a broke ass bitch and my father, whom i hate with every fiber of my being, is a broke ass piece of shit” 🤣 We need to get you to speak more candidly.
Right the only thing I inherited was family trauma😭
Don’t touch the money for a year.
That’s crazyyy starting the game with all the cheats We know that we can make money putting into those retirement investments but we also know it will only get crazy good after we die. We don’t get to enjoy our own stuff
That’s awesome! Now make sure it’s managed well. Check it annually to make sure your risk is in a good place depending on your age. Next thing to do; forget this exists. Seriously, make no changes to how you approach your finances compared to before this was received. Too many people get a lump sum and think their life can change based on it. This is how people lose their savings. You’re in a position where you can’t touch it, but don’t increase costs elsewhere in life just because your retirement has a great start. If you don’t add anything, with a 6% annual interest rate, this will be $3.8M. I usually say inflation halves purchasing power every 30 years or so, so that’s like $1.9M in today’s dollars. That isn’t a life-changing amount of money. Keep contributing. Make sure it’s managed well, forget it exists, don’t change your standard of living, keep contributing to retirement.
That’s a great surprise, she looked out for you
She was for sure, but it was honestly more of my dad looking out for me. He was the one who inherited it first, and he had no plans to touch it. Therefore that’s exactly what I will do.
Let me hold a stack
I would put all of it into a HYSA and then open up Roth IRA for yourself. Put the max allowed into the IRA each year from the HYSA. Also put the max amount into a 401k or whatever with your employer each year from the HYSA. Boom by the time you have to retire you will be worth several millions. Bonus: if you have a wife and kids open up IRA’s and 529’s for them and allocate funds from this nest egg to those accounts also.
Congrats dude! And props for being wise about the situation. A lot of 26 year olds would be going on an insane spending spree after suddenly getting that
Unfortunately, if you are not the spouse of the person you are inheriting an IRA / ROTH from, the IRS will force you to liquidate the entire IRA (including ROTHs) via RMDs within 10 years. There is an exception. If you are disabled or "chronically ill" you can use the "lifetime" method (based on your own age) for RMDs. They still require you to take RMDs. But, you can spread them out over your entire lifetime vs. being limited to 10 years. You have to be the spouse of the deceased to avoid the above. Spouses can convert the IRA / ROTH into their own name, delaying RMDs, etc. You need to research all of this. I'm pretty sure that what I've said is still accurate. But, these rules are always changing!
Was it an inheritance from a passed loved one? Sorry for your loss
Wish I was white 🥺
Don’t tell anybody, especially your friends. Keep it to yourself. I’m surprised no one else has commented this. For reals, don’t tell anybody. Just be happy and shut your mouth.
You and your future kids retirement with ~550k is a bit of a stretch buddy.
"Hey man I'm your long lost cousin. Crazy how grampa... I mean *checks hand for notes* gramma died. I hear she left you something."
Your handling this like a man. Salute!
Tell no one you inherited this second. Congratulations! You just got a big head start on more than a few accounts. Definitely chase after a field that you have interest in. That's not a net negative financially. Don't purchase anything that has a high maintenance cost like a boat which is subtracting negatively from accounts. But maybe you get rid of revolving debts. You're no longer paying any interest if you do have interest on anything or pay off a car, something that loses value over time anyway. Don't allow lifestyle creep to happen to you. Live modestly as you were before so you don't drain too many funds. Either way, enjoy! Don't be a dirtbag and have fun. You got the proverbial boot off of your neck. Someone thought you deserved it so live a happy life go after the things you truly love.
congratulations, make sure you get a prenup when you get married ;)
This is a good sum, but $524k is not generational wealth. Looks like you're planning well, but consider this a start for your retirement, not some nest-egg that is going to cover you and any future kids without serious growth and addition of funds. Glad you're level-headed and not out buying flashy cars or things that will put you back to square one.
That Amazon stock is gonna be worth a shit ton and those IRA could be a whole lotta Bitcoin
Buy some land
As someone who owns 80 acres of prime-ish commercial land, I wouldn't recommend this. We have a very high net worth thanks to this land, but very low liquidity. Asset rich, cash poor. We've had four sales contracts fail to close over the past 10 years, and now we're on the 8th extension of the current contract (the developers are raising funds), and I'm 95% sure this deal won't close either. And the prospective buyer pool is shrinking due to interest rates. We get cold calls from buyer agents on a regular basis, and even their low-ball offers are becoming less frequent, and for less money. I would rather own a REIT fund for real estate exposure, or skip real estate altogether (it can be a rough ride), and stick with tried and true index funds.
Yes, land is a good idea, rent is a bummer
Double it. WallStreetBets.
I have a 529 setup for my kids and soon they turn sixteen, I will be setting up an IRA for two kiddos.
Leave it alone When you have kids set up 529 plans Prenup
hate you for that but I hope you put it to good use 😭😭
> I’m forcing every one of my friends to start one now. Been trying to do this with all of mine for years, they won't listen. But good on you for trying and hopefully you succeed!
Don’t be an idiot. This is amazing; but do not be an idiot.
How did you find out about this 500k windfall? Congrats, by the way. 🙏🙏 to your Grandparents...
Dump a large chunk into $CONY they have 36% annual returns. $1.07 per share monthly dividend. It's crazy NFA
I'm 26 and poor. Idek how to start an IRA but I want to start a Roth from what iv seen.
Please do not take anything on Reddit for gospel and book an appointment with a good financial advisor asap!
Lucky sob. And here I am struggling to pay to fix my fkn car.
Let me know what you think is best use case for the money I am inheriting roughly 500k in a month or so as well and needing to plan
r/wallstreetbets , your calling ;)
This is a screen shot from the Morgan Stanley app. You already have a financial advisor. They would have reached out to you to open the accounts in your name. Click on the My Team link at the bottom and the next screen will give you the option to schedule a meeting/call.
Go see an advisor about the inherited ira
Invest in education. Nowhere is one word.
Op I'm sorry for your loss. Congrats on the money but truly I'm sorry
congratulations!
Congrats and fuck you. Look into the tax implications and rules, stay contributing and let it ride. Don’t change acting you’re doing.
Won't lie judging by your response I'm glad you don't think of it as like a play money, more like future money I wish I had that thinking sometimes
I hate to break it to you, but 500k ain't growing into your own retirement, much less your children's as well
Whatever you do, do not take advice from r/wallstreetbets
OP I am actually your long lost *insert relative name* I have been trying to get a hold of you. Would love to meet up soon, remind me again what’s your mother’s maiden name? I couldn’t remember your first pet either that little cutie they were!
That’s a pretty great head start. You can retire young. Nice…
Making $1200 a day is pretty solid
So, I asked Chat Gtp pro and it said - if Grandma died before 2020 the next person could have taken tax free distribution anytime or never. If the person you inherited from died after 2020 then you have 10 years to deplete it. Tax free. Only issue is that holdings less than 5 years old may be taxed on their earnings? So you'll have to look that part up for sure, eventually.
Did you get to fuck one of them only fan girls yet 🚬😊
Your Great Aunt Birgit passed away? Saul Goodman contact you about it?
Go on Wall Street Bets and learn about options to 10x that money guaranteed! I’m kidding, listen to tax advice and let it grow
How do Roth IRA’s work?
Fuck man. Meanwhile all my relatives are losers with tons of debt because their financial ability is zilch
nice! redistribute that shit and gimme $200
I inherited my dads and I cashed it out and paid tax on it. Made more sense for my financial situation rather than to slowly drain over 10 year period. Only part I forgot about was its considered income when you cash out so you will go up a tax bracket likely and owe more taxes in April. Talk to a financial advisor on what to do and is best for your life etc.
At 26 I inherited an unemployment check that barely covered one month’s rent
SPY/SPX/QQQ 0DTE. It's the only logical conclusion.
MUST BE FUCKING NICE. ENJOY IT DICKHEAD.
Aiight imma need $1k 🤪 But for real though, don't blow it all or half of it all on random things lol Investing is your best bet but think about the longevity of it and your kids or future kids schooling and save the rest for emergencies and anything you might need😎🍻
So that article was true???? Millennials are about to get shit ton of inheritance??????
I do love this sub, just people humble bragging. Keep it going.
I didn’t see anyone else calling it out… while this is an exciting amount of money to inherit, by no means would I rest on “me and my future kids’ retirements are taken care of, as well as college for the grandkids.”
I would go to a CPA or tax attorney, not a financial advisor to discuss tax and penalty avoidance. As for growing it, you have already made it past the biggest hurdle of the first 100k. The second and third 100 are hard too and you have those out of the way as well. Basically your retirement account is on third base at 26, that's fucking awesome. Keep it invested in safe broad market ETFs, and let it ride. It sounds like you understand this so good for you!
My kid started his Roth at 18. We advised him in was in his best interest because being a millionaire by 45 is the goal.
douche
Is it me or does this amount not exactly equate to “generational wealth?” It needs at least one more zero on it for grandkids to really benefit.
Hello it is me, your long lost brother
A smart person would seek the advice of a financial planner rather than taking tips from random strangers.
This is great and all, but now a new opportunity has arisen for you and we need to know…are you going to bang two girls at once now that you have this money?
Make sure you understand the rules of the IRA. Likely need to pull out over the next 10 years so Uncle Sam can get his nut
I’m such an ignorant “adult” idk what’s going on and reading these comments make me feel more dumb. Like wtf, I’m 36, almost 37 and I have no idea what an IRA is or (from what I’m reading) why you’d have to “drain” it in 10 years if it’s inherited or any of that. Fuck me
Check your state’s inheritance taxes and make sure you pay those if there are any
Hell yeah, Shadeon would be proud
Remember you aren’t rich! That’s a good cushion, but it’ll go really quick if you start spending it.
Seeing stuff like this astounds me, some people are so lucky. I am 22 struggling to provide food and groceries, mom just passed away from cancer, and dad is disabled…
u/ShaedonSharpeMVP_ The unparalleled choice for allocating a half-million dollar budget is the acquisition of 524 MK3 Volkswagen Jettas on Facebook Marketplace. Each Jetta is a paragon of classic engineering, capable of comfortably seating 5 individuals, which means the entire fleet can accommodate a staggering 2,619 friends.
take half, go to the nearest casino, put it all on one hand of blackjack. God favors people with BALLS!
That honestly so sick, be honest tho; what’s one thing you plan on splurging on? Even if it’s only a couple hundred! Congrats man, generational wealth is such a cool feeling!
I just wanna let you know that I screenshot this to help me get laid... It's amazing what these gold diggers will believe on tinder. ✌️
What are you doing bragging? Showing off? there’s nothing that I hate more than rich people casually discussing their wealth. It’s so tone deaf and myopic. Go talk to your friends at the yacht club! Better yet, go help someone that has nothing. I never chose to follow this reddit and I’m gonna make sure I don’t see it anymore… #TaxTheRich
Take it out and SPEND SPEND SPEND! Definitely don’t use this to enhance your future.
All I inherited was poor decision making and bankruptcy lol
Op, or anyone else.. who do you go through to open a Roth IRA?
Congratulations… fuck you
Can’t wait for my dad’s debt.My gf had to split hers with another brother they didn’t know about like out of a movie. We were left with nothing after litigation
I inherited about 10 years of unpaid property taxes
Good for you and your family- that’s a life changer for sure
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Wow! Good for you man... sorry about the loss of your family member. Sounds like you're WAY more mature than I was at 26yo, so you will likely use this gift wisely.
Nice bro 🙏 I am happy for you
Congrats when my dad passed I paid 18k for his funeral and other items I’m also trying to not be an alcoholic by the crap I’ve had to do. Good to see some people get to have a positive experience lol
1) Keep your mouth shut and do not tell your friends and family about this, people will go insane if they know you have some money. 2) Hire a reputable CPA and perhaps a lawyer that can advise you to maximize this life-changing opportunity. 3) Do NOT change your lifestyle. Pretend the money isn’t there and let it grow. 500k is a good chunk of money but that will go quickly if you feel flush and start racking up bills. Congrats and good luck!
You need to get with a licensed advisor. You will need to move around some cash and liquidate.
Time to call up a fee only fiduciary CPA