Skip to main content

Splitting an Inherited IRA Amongst Two Beneficiaries


Inheriting an IRA can be a blessing, but ensuring it is appropriately divided between beneficiaries also comes with challenges. Have a question you want to be answered on the show? Call or text 574-222-2000 or leave a comment! Want to speak with a Certified Financial Planner™? Visit or call 574-247-5898. Find more information about the Wise Money Show™ at Be sure to stay up to date by following us! Facebook - ​ Instagram - Twitter - ​ Want more Wise Money™? Read our blog! ​ Listen on Podcast: ​ Subscribe on YouTube: Mike Bernard, CFP® offers advisory services through KFG Wealth Management, LLC dba Korhorn Financial Group. This information is for general financial education and is not intended to provide specific investment advice or recommendations. All investing and investment strategies involve risk, including the potential loss of principal. Asset allocation & diversification do not ensure a profit or prevent a loss in a declining market. Past performance is not a guarantee of future results....(read more)



LEARN MORE ABOUT: IRA Accounts
TRANSFER IRA TO GOLD: Gold IRA Account
TRANSFER IRA TO SILVER: Silver IRA Account
REVEALED: Best Gold Backed IRA
Dividing an Inherited IRA Between Two Beneficiaries Inheriting an Individual retirement account (IRA) can be a significant financial windfall, but it also comes with its fair share of complexities. Among the many challenges that beneficiaries may face, deciding how to divide an inherited IRA between multiple beneficiaries can be quite a headache. This article aims to shed light on this specific issue and provide guidance on how to navigate this process efficiently and fairly. When an IRA is passed down to multiple beneficiaries, it is crucial to understand the options available for distribution. The first step is to determine whether the inherited IRA is a traditional or Roth IRA, as each has different tax implications. For a traditional IRA, the beneficiaries typically have two options: taking a lump-sum distribution or setting up separate inherited IRAs. Choosing a lump-sum distribution may seem tempting, as it provides an immediate cash infusion. However, this option often comes with significant tax consequences. The entire amount withdrawn from the traditional IRA will be subject to income tax, potentially pushing beneficiaries into a higher tax bracket. Additionally, withdrawing a large sum may also have adverse effects on other financial aspects, such as eligibility for certain tax credits and deductions. Setting up separate inherited IRAs is generally a more tax-efficient option. Each beneficiary can establish their own account within their name, allowing them to stretch the distributions over their own life expectancy. This approach offers the advantage of deferring taxes on the required minimum distributions (RMDs) and potentially maximizing the IRA's growth over time. Furthermore, beneficiaries can choose their preferred investments and distribution amounts, providing greater flexibility and control over their inherited assets. When dividing an inherited IRA between two beneficiaries, it is essential to determine their respective percentage interests. This division can be done in several ways, such as by specifying the exact percentage in the original IRA documentation or, alternatively, equally splitting the account. The latter option is common when there is no specific guidance from the original IRA owner. However, before settling on a distribution method, beneficiaries should consult a financial advisor or tax professional to ensure compliance with IRS regulations and minimize any potential consequences. Moreover, it is crucial to note that the age difference between beneficiaries plays a significant role in calculating RMDs. The age of the oldest beneficiary is used to determine the distribution amounts. Consequently, if one beneficiary is significantly older, the distribution amounts will be higher, impacting the potential growth of the inherited IRA. To simplify the process and minimize complications, it is advisable to work closely with a financial advisor who has experience in managing inherited IRAs and understands the complexities associated with dividing assets between beneficiaries. They can provide personalized advice based on individual circumstances, helping to optimize the distribution strategy and minimize any unnecessary tax burdens. In conclusion, dividing an inherited IRA between two beneficiaries requires careful consideration and an understanding of the available options. Setting up separate inherited IRAs is generally a more tax-efficient approach, providing beneficiaries with the flexibility to stretch distributions over their own life expectancies. Consulting a financial advisor is highly recommended to ensure compliance with IRS regulations and make informed decisions. https://inflationprotection.org/splitting-an-inherited-ira-amongst-two-beneficiaries/?feed_id=118931&_unique_id=64b801bb0b3c7 #Inflation #Retirement #GoldIRA #Wealth #Investing #dividinganinheritedIRAbetweentwobeneficiaries #financial #inheritedira #inheritediratomultiplebeneficiaries #korhorn #splittinganinheritedira #wisemoneyshow #InheritedIRA #dividinganinheritedIRAbetweentwobeneficiaries #financial #inheritedira #inheritediratomultiplebeneficiaries #korhorn #splittinganinheritedira #wisemoneyshow

Comments

Popular posts from this blog

American Hartford Gold Review – Best Gold IRA? Pros and Cons

In this American Hartford Gold Group review, I go over what makes this Gold IRA company unique, the pros and cons, their fees, and much more. Get Their Free Guide Here: 00:00 Intro 00:25 Is Gold a Good Investment? 01:02 Why Choose American Hartford Gold? 01:48 Is American Hartford Gold a Legitimate Company? 02:35 How Does American Hartford Gold Work? 03:30 American Hartford Gold’s Price Match Guarantee 03:57 American Hartford Gold’s Minimum Investment 04:28 American Hartford Gold’s Buyback Guarantee 04:56 American Hartford Gold Storage and Security 05:54 American Hartford Gold Free Silver Promotions 06:11 No Overseas Storage Options 06:22 American Hartford Gold Group Price List Not Available Online 06:38 American Hartford Gold Group Review Summary 👉 FREE Resources: ➜ Gold IRA Company Reviews: American Hartford Gold Group continues to be a well-respected market leader in the gold IRA and precious metals investment industry. The company’s proven track record ...

How to Change Password for Fidelity Investments App

How to Change Password for Fidelity Investments App In this video, I'll show you How to Change Password for Fidelity Investments App. This is the easiest and fastest way to Change Password for Fidelity Investments App. Make sure you watch until the end of this video to find out How to Change Password for Fidelity Investments App on Android and iPhone. These methods work on Android as well as iOS 11, iOS 12, iOS 13, iOS 15 and iOS 16. Hope you enjoy! Video Parts: 00:00 Intro: How to Change Password for Fidelity Investments App 00:07 Changing Password on Fidelity Investments App 00:38 Outro: Ending Thanks for watching! ❤ Bytes Media © 2022 Topics Covered: Bytes Media how to how to fix How to Change Password for Fidelity Investments App how to change password for fidelity investments fidelity password fidelity login how to change fidelity wifi password i forgot my fidelity online banking username and password fidelity password requirements fidelity customer service fi...