Suze Orman's Women & Money (And Everyone Smart Enough To Listen)
Ask KT & Suze Anything: Should I Get a Reverse Mortgage to Pay for my Daughter’s Wedding?
Aug 1, 2024
Suze Orman, a renowned financial expert and author, shares her wisdom about personal finance. She dives into the complexities of inherited IRAs, explaining required minimum distributions and the nuances of splitting assets among heirs. Suze also tackles the contentious issue of using a reverse mortgage to fund a daughter's wedding, stressing the importance of financial priorities. Additionally, she addresses concerns about banking security amidst potential crises, urging caution in managing savings. Tune in for empowering insights!
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Quick takeaways
- Understanding the importance of required minimum distributions for inherited IRAs can optimize beneficiaries' tax situations over time.
- Parents should prioritize their financial stability over lavish wedding expenses for their children, exploring alternative, cost-effective celebrations instead.
Deep dives
Navigating Inherited IRAs
When inheriting an IRA, it is crucial to understand how required minimum distributions (RMDs) are calculated. If an inherited traditional IRA is divided between two beneficiaries, each one must have their inherited IRA account established, and RMDs will be based on each individual's life expectancy rather than splitting the original account's RMD. For example, if a $50,000 account is inherited and the beneficiaries are aged 60 and 50, their respective RMDs will be calculated using the IRS life expectancy tables, resulting in different amounts they must withdraw each year. This method ensures that taxes due on the withdrawals correspond to the beneficiaries' lifespans, optimizing their tax situation over time.
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