Explore the recent changes to inherited IRAs and what they mean for your financial planning. Learn how tax implications affect backdoor Roth IRA contributions and rollovers. Discover strategies for optimizing your retirement accounts, particularly for high-income medical professionals. Dive into real estate investment opportunities and hear success stories about improving work-life balance. Plus, get insights on insurance needs for medical students and how to avoid common financial mistakes.
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Inherited IRAs Don’t Break Backdoor Roths
Inherited IRAs are excluded from the Form 8606 pro rata line for traditional/SEP/SIMPLE IRAs.
They therefore do not break a backdoor Roth calculation.
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Inherited IRAs Rarely Transfer To Your Accounts
You generally cannot roll an inherited IRA into your own IRA or 401(k).
The only exception is surviving spouses who can combine the account with their own.
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Let Inherited Roths Ride For Ten Years
If you inherit a Roth IRA, leave it untouched for the full 10-year window.
Let it compound tax-free and asset-protected before withdrawing.
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If you are fortunate enough to inherit an IRA there are some things you should know. Inherited IRAs, also known as stretch IRAs (https://www.whitecoatinvestor.com/new-stretch-ira/) have changed this year. You can no longer leave it to your great grandchild and have them stretch it over the next 80 years. They have to withdraw all the money in year 10. But a listener asked how this affects the backdoor Roth IRA, when it makes sense to roll the IRA over, and whether you can roll these over in the same way as you would other accounts. We delve into these questions in this episode for those looking forward to an inherited IRA. For the rest of you, we talk about whether you should do Roth or tax-deferred 401K contributions, rebuilding your practice during COVID, rebalancing your accounts, whether a medical student should buy disability and umbrella insurance, and what to do if you should have done your Roth IRA through the backdoor but you didn't. Check out the full show notes here https://www.whitecoatinvestor.com/inherited-iras-podcast-189.
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The White Coat Investor has been helping doctors with their money since 2011. Our free financial planning resource covers a variety of topics from doctor mortgage loans and refinancing medical school loans to physician disability insurance and malpractice insurance. Learn about loan refinancing or consolidation, explore new investment strategies, and discover loan programs specifically aimed at helping doctors. If you're a high-income professional and ready to get a "fair shake" on Wall Street, The White Coat Investor is for you!
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