Handling Hand-Me-Down Dollars
Inheriting an IRA can be a great source of additional income, but the penalties for mismanaging one are severe. There are strict guidelines regarding distributions from inherited IRAs, and you want to avoid making mistakes. According to the IRS, taxpayers paid over $3.6 billion in penalties on qualified retirement plans for the 2004 tax year.1 For Spouses If you inherit an IRA from a spouse, you can roll the assets into your own IRA and delay withdrawals until you reach age 70½. Or you can keep the IRA in the decedent’s name and remain the beneficiary, in which case you…