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Jeffery Palmer, ChFC®
Financial Planner
CA Insurance Lic. #0F60729
Cathy Davis
Client Service Specialist
Phone: 828-333-4748
Christina Palmer
Client Service Specialist
Phone: 828-333-4747
christina.palmer@prudential.com
Gaylen Allen
Client Service Specialist
Phone: 828-575-1250
Jaclyn Schmitz
Client Service Specialist
Phone: 828-333-4139
The Palmer Group
603 Alliance Court
Asheville, NC 28806
Phone: 828-687-8818
Fax: 828-687-4482
Website: jeffpalmergroup.com
July/August 2025
Inherited IRAs: What You Need to Know
Have you inherited or expect to inherit an IRA in the future? If so, here are some key questions and answers regarding inherited IRAs in 2025.
Can Inherited IRAs Come From Any IRA?
Yes, they can come from traditional IRAs, Roth IRAs, or other retirement accounts.What's New for 2025?
The SECURE Act 2.0 has modified distributions for beneficiaries. One critical change is that most non-spousal beneficiaries must withdraw all funds from an inherited account within 10 years. This reset impacts how you strategize the taxable implications of those withdrawls, especially if you expect to inherit a substanial amount.EXCEPTIONS TO THE 10-YEAR RULE
Surviving spouses, minor children, disabled individuals, and those not more than 10 years younger than the deceased can take distributions over their life expectancy instead of the 10-year rule.
Surviving spouses, minor children, disabled individuals, and those not more than 10 years younger than the deceased can take distributions over their life expectancy instead of the 10-year rule.
What Should I Consider When Inheriting an IRA?
When you inherit an IRA, consider the tax implications carefully. The type of account (traditional versus Roth) will affect how distributions are taxed. For traditional IRAs, withdrawals are taxed as ordinary income, whereas Roth IRAs are tax-free if the account has been open for over five years. Consulting with a financial professional could also help you create strategies that align with your wealth management goals.How Do I Manage My Inherited IRA?
Managing an inherited IRA involves being aware of and adhering to the required distribution rules. Given the limitations of the10-year rule, consider when and how much you take out to avoid tax hits. This could mean liquidating some assets strategically to minimize tax burdens. Regular communication with a financial or tax professional is key to navigating potential financial pitfalls.
Can I Convert an Inherited Traditional IRA to a Roth IRA?
While you can convert an inherited traditional IRA to a Roth IRA, understand that this would trigger a tax event since those funds will be treated as taxable income. High-net-worth individuals could consider this route if they believe they can offset the tax hit with deductions or if they expect their tax bracket to decrease in the future.The new rules have dramatically changed the landscape. Stay proactive, consult with your trusted professional, and plan
thoughtfully.
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Jeffrey Palmer is a Financial Planner with, and offers securities and investment advisory services through LPL Enterprise (LPLE), a Registered Investment Advisor, Member FINRA/SIPC, and an affiliate of LPL Financial.
LPLE and LPL Financial are not affiliated with The Palmer Group.
This newsletter is general educational information provided by a Prudential Financial Professional and is not intended to market or sell any specific products and services, but rather provide general information about the subject matter covered only.
The Palmer Group and LTM Marketing Specialists LLC are unrelated companies. This publication was prepared for the publication’s provider by LTM Client Marketing, an unrelated third party. Articles are not written or produced by the named representative.
The information and opinions contained in this web site are obtained from sources believed to be reliable, but their accuracy cannot be guaranteed. The publishers assume no responsibility for errors and omissions or for any damages resulting from the use of the published information. This web site is published with the understanding that it does not render legal, accounting, financial, or other professional advice. Whole or partial reproduction of this web site is forbidden without the written permission of the publisher.