Inheriting a parent’s IRA or 401(k)? Here’s how the SECURE Act could create a disaster – MarketWatch

Formerly, nonspousal beneficiaries might decide to take just required minimum circulations over their life span, rather than taking all the cash within five years. Under the SECURE Act, there are no needed minimum circulations for inherited IRAs (known as the “stretch IRA”). There are no tax breaks for taking funds from standard IRAs, and the same uses to acquired IRAs.

Formerly, nonspousal recipients could choose to take just required minimum circulations over their life span, rather than taking all the money within 5 years. Under the SECURE Act, there are no required minimum distributions for inherited IRAs (known as the “stretch IRA”). With the new law, beneficiaries need just make sure all of the cash is taken out within 10 years. There are no tax breaks for taking funds from conventional IRAs, and the exact same applies to acquired IRAs. That implies payments will be taxed at the beneficiary’s earnings tax bracket, stated John Iammarino, primary and creator of Securus Financial.

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