Talk To Your Parents About Your Inheritance
As you know, the holiday season is a perfect time to talk with your parents about the future. While retirement security should be their top priority, many financially secure retirees intend to pass wealth to their children. Lack of proper planning could potentially create new tax risk for you and your siblings.
Tax laws regarding inherited IRA and retirement plan assets changed in 2020, when the SECURE Act (Setting Every Community Up for Retirement Enhancement) went into effect.
Inheriting your mom or dad’s IRA could have significant financial consequences.
Depending on your income and the amount of money in your parent’s IRA or retirement plan, inheriting these assets could potentially:
- Increase your income tax and capital gains tax exposure
- Move you to a higher tax bracket
- Raise your modified adjusted gross income
Are there more efficient options?
If your parents have sufficient retirement income, then they should look at a smarter way to use their IRA and qualified plan assets to create a tax-efficient legacy for you, their kids.
Click the links below to stay connected on social media.
Sagicor Life Insurance Company, home office Scottsdale, Arizona issues life insurance and annuities. Products not available in all states and state variations may apply. Products have limitations and restrictions including surrender charges.
Form Number: 9550