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INHERITED IRAS AND EMPLOYER RETIREMENT PLANS: TODAY’S SLOTT REPORT MAILBAG

By Sarah Brenner, JD
Director of Retirement Education

Question:

Hello,

Client (72) has recently inherited a “Beneficiary IRA” account. My question is for next year:  Can she use qualified charitable distributions for her beneficiary IRA?

Thank you,

Kathy

Answer:

Hi Kathy,

Yes, this would work. Beneficiaries can take qualified charitable distributions (QCDs) from inherited IRAs as long as they are over age 70 ½.

Question:

Dear Ed Slott Experts,

I changed my job in January 2022 and my new employer does not allow me to contribute to a 401(k) plan for a year. Other than an IRA, is there any other way to contribute to a 401(k) or some other kind of retirement pre-tax plan so it will help with my tax situation?

Thanks,

Umang

Answer:

Hi Umang,

Unfortunately, this is predicament that many workers find themselves in. If your employer does not offer a retirement plan, your options are limited. You must be an employer to be eligible to establish a qualified plan. If you have a side job, you may qualify as self-employed, in which case you could establish a plan for your business. If you do not, an IRA would be your only option. If neither you nor your spouse participates in a plan at work, your IRA contribution would be deductible and that could help with your tax situation.

https://www.irahelp.com/slottreport/inherited-iras-and-employer-retirement-plans-todays-slott-report-mailbag

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Investment advisory services are offered through Foundations Investment Advisors, LLC and is a SEC registered investment advisor.

Investment advisory services are offered through Donato Wealth Management and is a SEC registered investment advisor.