Q:
Is there a way to input an inherited IRA into the software? This is an IRA with current RMDs based on the age not of the contact, but on their deceased parent.
A:
Great question. For RMD purposes RV will not automatically calculate those UNLESS you are under the old rules which means the account was inherited in 2019 or less.
If that’s the case the beneficiary can role into their own IRA and then use their own life expectancy and would have already done so. And if still qualified RV would be doing the RMDs using the client’s life expectancy (or the spouse if you put it in there).
IF it is inherited in 2020 or later they are under the new rules which require a 10 year pay out OR you can just wait 10 years and withdraw it at the end of the 10 years. The beneficiary does not have to take RMDs during the 10 year period.
All that being said, if someone inherited an account in 2020, I personally would recommend a cash infusion and inject the amount at the end of the 10 years. You can even add a growth rate. That way you manage that for 10 years.
If instead they need the money right now, then you can infuse the entire amount now and they can use it now and they would not be required to withdraw any minimum… assuming the entire amount was the withdrawal.
Note all of the above assumes the inheritor is NOT A SPOUSE but a non-spouse… as you mention this was a child of a parent so non-spouse.
If it were inherited by a spouse, the old rules still apply and they can use their own life expectancy.
0 Comments