Q&A of the Week September 29, 2021

Question:

I am the beneficiary of an IRA. Since the SECURE Act allows 10 years to take the withdrawals, how can I benefit the most?

Answer:

You have a couple of options so you can determine what may be most beneficial for your personal situation.

1. If you will benefit most by paying the least amount in taxes, you can avoid being placed in a higher tax bracket by taking annual withdrawals.

2. If you will benefit most by having more cash after taxes, you can keep the money invested so that it can continue to grow, and then withdraw the full amount at the end of the 10 years. You will pay a lot in taxes, but overall, you will make more money.