Ask Terry Questions What move to make with inherited IRA

What move to make with inherited IRA

By Terry Savage on April 03, 2024 | Financial Planning / Retirement

Dear Terry,
I currently have a Roth IRA with about $70K in it and inherited a IRA with a little over 400k in it. The inherited IRA falls under the 10 year rule for which I am in the 3rd year (years 1,2, and 3 were forgiven for distributions because of pandemic and the IRS dragging their feet with the Rules) Now it looks like at least I have to take a minimum distribution (for my life expectancy) as for my late father had already started taking distributions.
I am 59 years old, and I also have a brokerage account with just over 100k in it. My work doesn’t have 401k plan (other than CalSavers which has a $8000 limit) I also contribute the max to my Roth ($8000) every year.
Should I drop CalSavers and just put the $8k limit in the individual Roth IRA? And more importantly how do I deal with the minimum distributions that will start this year? Is there anyway to contribute more to an IRA? I know that if your company has an IRA program you can catch up with close to $23k. Is there a way to make me self employed to contribute the $23k? Or do I just have to “bite the bullet” and pay the taxes and put the distributions in my brokerage account?

Terry Says

Whew, that’s a complicated question. First, you don’t want to be self-employed! You’d have to contribute both sides of FICA (Social Security). So throw away that thought!

Second, it’s hard to give specific advice without knowing more. YOu need a Certified Financial Planner who only charges fees, not commissions — a true FIDUCIARY!! That’s advice you can trust. Learn how to get matched with one at Wealthramp.

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