Disbursements of 401K prior to death
- Thread starter runkpanole
- Start date
Roth conversions are not a one time thing. I agree he should plan wisely and really should seek some professional advice on how much is appropriate but man you're throwing out some bad info in this thread.
How many people need to tell you that’s it’s not considered inheritance tax…that is different than income tax.
It is RMDs…you should stop posting in this thread
A lot of people in your dad’s generation are embracing a ‘giving while living’ mindset. He should want to have confidence he won’t need the money that he plans to give away. From there, he needs to consider the different tax buckets he has within his total retirement savings and determine the most efficient approach to raise the funds he wants to gift. Tax rates aren’t getting any lower, so it’s ok to pay taxes at this time…and that’s possibly not his top concern. If that feels like to much then he should seek out a retirement planner, not just an advisor that focuses on investments as they may not be able to help with all this.
I may be wrong on the one time - I know when I made a substantial conversion a few years ago I understood that it was a one time opportunity. Perhaps I was given wrong info or things have changed.
Do you disagree with anything else I've offered?
As many as want to. Again, I'm not sure how it's classified matters. Inherited 401Ks are taxed.
Typos are fine, but you did it multiple times, and brought more confusion to this thread than value it seems
LOL. If someone can't figure out that RMA in this context is a typo then they deserve to lose their money.
Most of the info you have shared is either wrong or confusing.
LOL. If someone can't figure out that RMA in this context is a typo then they deserve to lose their money.
It's not wrong other than I used the term "inheritance" to describe taxes that are paid on an inherited 401K or IRA. I wasn't thinking I needed to be precise in terminology so I can understand why it is confusing for you.
False. Roth 401k’s are very much a thing.
Thank you all. My main concern was him being fiscally ok while he’s alive. He mentioned monthly payments to all 8 of us, which would be helpful to a couple of my siblings. The no pic wife and I agreed if he goes this route, the kids will get a nice boost in their 529s.
Well this thread is a train wreck.
Tell your old man to with drawl the money for himself, fill up some duffle bags with 50's and drop them off at your house.
Tell your old man to with drawl the money for himself, fill up some duffle bags with 50's and drop them off at your house.
In fact, only six states — Iowa, Kentucky, Maryland, Nebraska, New Jersey and Pennsylvania — impose a tax on inherited assets as of 2024.
And I believe Iowa excludes children, and is phasing it out altogether if it hasn't already.
That would be my concern, as well. Especially if he's only 70 years old. Hell, I'm turning 67 in a couple of weeks and I'm years away from evening thinking about that kind of thing. If he blows this his money giving it away to eight kids, ten years from now he could find himself in serious condition.
Then you and a few other kids will end-up kicking in to pay for his expenses, while the siblings who aren't as well off will plead poverty.
Indeed. This is the last year. And it only applies to someone that’s not a spouse or lineal descendant.
Can I ask the logic on this? I-bonds adjust to inflation which is a good thing but if they are going to be held for a long time, the market will almost certainly outperform the bonds.
My brother died in September 2023 and I am his only heir. I will be paying inheritance tax on his estate, but you are correct if I were his spouse or child instead of his sister I would owe no inheritance tax.
Assuming the kids cash them out for college living expenses or before starting careers the interest would be tax free - federal and state/local.
That plus less risk.
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$10k per year for me and wife. No longer buying for my kids once they got to college.
Me and wife will start cashing ours in when I retire.
I really wish you weren’t too stupid to realize how stupid you actually are.
