📢 Important update: The IRS has finalized regulations on the 10-year rule for inherited retirement accounts. Key points to understand: 1️⃣ Two versions of the rule: ➖ If the account owner dies before the Required Beginning Date (RBD), beneficiaries have 10 years to distribute the entire account. ➖ If death occurs after the RBD, beneficiaries must take annual distributions AND empty the account within 10 years. 2️⃣ The RBD is generally April 1st, following the year the account owner turns 73. 3️⃣ Good news: There's a penalty waiver for missed 2024 distributions. Potential strategies to consider: 👉 Leaving retirement funds to beneficiaries in lower tax brackets 👉 Converting traditional IRAs to Roth IRAs 👉 Using Qualified Charitable Distributions for those over 70½ 👉 Beneficiaries: Think about timing your distributions over the 10-year period to optimize your tax situation. These changes may impact your long-term financial and estate strategies. It might be time to review your approach to see if it aligns with these new regulations and optimizes your legacy goals. Some housekeeping items to remember: Once you reach age 73, you must begin taking Required Minimum Distribution (RMDs) from a traditional IRA in most circumstances. Withdrawals from traditional IRAs are taxed as ordinary income and, if taken before age 59½, may be subject to a 10% federal income tax penalty. To qualify for the tax-free and penalty-free withdrawal of earnings, Roth IRA distributions must meet a 5-year holding requirement and occur after age 59½. Tax-free and penalty-free withdrawals can also be taken under certain other circumstances, such as the owner's death. The original Roth IRA owner is not required to take minimum annual withdrawals. Questions about how this impacts your specific situation? Let's discuss. 👇 #RetirementStrategies #EstateManagement #FinancialFuture #Taxes
