Inherited IRA
I just read your Chicago Tribune question on non spousal inherited IRA. I was the beneficiary of an inherited IRA from my mom in December 2021 (last year). I transferred the funds from the broker my mom had and opened an inherited IRA with my broker. Am I safe to understand that I have to withdraw those funds that I put into my new inherited IRA within 10 years? If so, wouldn’t it be a good investment strategy to withdraw the funds now and put the annual maximum allowable based on my earnings over the next 10 years to my own IRA?
Terry Says
That’s an interesting question. If you withdraw now, you will pay ordinary income taxes on the entire amount. I’d think you would rather have a 10 year “call option” on the stock market, and use it to invest in the S&P 500 — assuming you have at least 10 years until your own retirement.
Of course, the real advice is to ALSO create your own IRA since you’re still working. Make regular contributions and make it a ROTH IRA which will have no required distributions in retirement.
