| Inherited Traditional IRA - Advice Sought |
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evanboyd
New Member
Cash: $ 0.90
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Joined: 11 Dec 2011
Location: NY
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| Inherited Traditional IRA - Advice Sought |
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Nearly 59, inherited from my late Dad about $133K, brother inherited identical amount. Take out the RMD each year, now about $5K, and pay normal taxes on it (IRS gives me the figure).
Yes, I'm aware I can take any of it out when I want, but I'm not an idiot, I don't want to be taxed out of the ordinary or lose even 1/3 to taxes.
Can I speed up the withdrawal process? I don't see how I'm ever going to get all of it, and I'd like to put it in a more lucrative CD (currently 1.3%).
I'm a very conservative, cautious person with my inheritance having been burned with the stock market, so I stick with CDs. Can I withdraw the $1.6K in interest this year without getting hit with crazy taxes?
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Wed Dec 14, 2011 4:14 am |
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coaster
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Taxes shouldn't be all that bad; you might be working with the wrong numbers. Your cost basis is market cost on the day the account passed into your hands, not the original cost. You don't say when, but I take it it's fairly recent. Capital gains taxes are 15% and surely there hasn't been much in the way of gains.....
~Tim~
Eye Candy : Why Whimsy
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Wed Dec 14, 2011 8:06 am |
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oldguy
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Tim, poster mentioned RMD, maybe it's still in an IRA?
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Wed Dec 14, 2011 1:33 pm |
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coaster
Senior Advisor
Cash: $ 1357.20
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Ahh ... I thought he was just bouncing it as a possibility; if it's already begun that's a different story ...
~Tim~
Eye Candy : Why Whimsy
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Thu Dec 15, 2011 6:44 am |
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oldguy
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quote:
Can I speed up the withdrawal process? I don't see how I'm ever going to get all of it, and I'd like to put it in a more lucrative CD (currently 1.3%).
You don't have to speed up withdrawal to re-invest it. Money in an IR Account can be invested in whatever you like - your 1.3% CD, any other CD that you choose, a bond fund, a mutual fund of stocks, individual stocks, and so on. Re-investing the money within the IRAccount isn't a taxable event.
quote:
so I stick with CDs. Can I withdraw the $1.6K in interest this year without getting hit with crazy taxes?
You are required to withdraw the $5000 RMD, the taxes will be at your ordinary income tax rate. So yes, include the $1600 of interest in the $5000 RMD. Personally, I wouldn't keep $133,000 in a 1% CD - with 3% inflation, you are losing almost 2% per year of purchasing power, that's a $2500 per year loss in value.
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Thu Dec 15, 2011 6:41 pm |
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