What’s a Widow to Do With Inherited Retirement Accounts? Financial Advice for Widows

Losing a spouse brings immense emotional challenges, and managing inherited retirement accounts adds another layer of complexity. At Drenen Financial Services, we understand the financial difficulties widows face. Therefore, we are here to help you make informed decisions regarding financial advice for widows, and inherited retirement accounts.

Contact Drenen Financial Services at 413-569-0015 or email us at office@drenenfs.com to schedule an appointment. Visit drenenfs.com for more information.

Key Steps for Managing Inherited Retirement Accounts

1. Review Beneficiary Designations After losing your spouse, review the beneficiary designations on all retirement accounts, including IRAs and 401(k)s. Make sure these align with your current wishes.

• IRS Guidance: Learn more about inheriting retirement accounts from the IRS’s publication on IRAs.

2. Understand Your Options as a Spouse Beneficiary As a surviving spouse, you have several unique options for managing inherited retirement accounts:

• Treat as Your Own: Transfer the assets into your existing IRA and treat them as your own. This option, therefore, provides the most flexibility regarding Required Minimum Distributions (RMDs).
• Open an Inherited IRA: Roll over the assets into an Inherited IRA and follow the special RMD rules for spouse beneficiaries.
• Take a Lump Sum Distribution: Withdraw the entire amount, although this could have significant tax implications.

3. Follow RMD Rules Understanding and following the Required Minimum Distribution rules is crucial:

• Your IRA: If you treat the inherited retirement account as your own, follow the standard RMD rules based on your age.
• Inherited IRA: With an Inherited IRA, you may defer RMDs until your spouse would have reached 73, or start RMDs immediately if they had already begun.

Check the IRS RMD guidelines for more details.

4. Plan for Tax Implications Inherited retirement accounts often come with tax consequences:

• Traditional IRAs: Distributions are taxed as ordinary income, impacting your tax bracket.
• Roth IRAs: Distributions are generally tax-free if the account was held for at least five years.

Working with Drenen Financial Services

Navigating the complexities of inherited retirement accounts can be overwhelming. Therefore, at Drenen Financial Services, we specialize in helping widows make informed financial decisions.

Contact Drenen Financial Services at 413-569-0015 or email us at office@drenenfs.com to schedule an appointment. Visit drenenfs.com for more information. Let us guide you through the financial challenges of managing inherited retirement accounts and help you secure your financial future.