1 00:00:46,740 --> 00:00:50,970 Suze: September 5th, 2024. Welcome everybody to the Women and Money 2 00:00:50,979 --> 00:00:56,110 Suze: podcast as well as everybody smart enough to listen today 3 00:00:56,119 --> 00:00:59,569 Suze: is Ask KT and Suze Anything but 4 00:01:00,340 --> 00:01:01,139 Suze: hi KT. 5 00:01:01,150 --> 00:01:04,819 KT: Good morning. Everybody. You better have a great cup of 6 00:01:04,830 --> 00:01:08,410 KT: coffee and sit down and listen to this with a 7 00:01:08,419 --> 00:01:11,639 KT: lot of attention because this is not going to be 8 00:01:11,819 --> 00:01:16,760 KT: an easy. No, no. Wait a minute, wait a minute, 9 00:01:16,769 --> 00:01:21,628 KT: I've been studying this podcast and these are all the 10 00:01:21,639 --> 00:01:22,199 KT: questions 11 00:01:22,309 --> 00:01:25,940 KT: that came in after Suze Sunday school last Sunday, 12 00:01:25,949 --> 00:01:26,179 Suze: which 13 00:01:26,190 --> 00:01:27,179 Suze: drove her 14 00:01:27,190 --> 00:01:27,709 KT: crazy, 15 00:01:27,720 --> 00:01:33,099 Suze: crazy crazy. She said, Suze, I said you have to 16 00:01:33,110 --> 00:01:39,169 Suze: know this stuff, KT, especially if something ever happens to me. However, 17 00:01:39,180 --> 00:01:44,169 Suze: let me first, just say before we begin, which is 18 00:01:44,650 --> 00:01:49,930 Suze: if you have not listened to last Sunday's master class 19 00:01:49,980 --> 00:01:57,319 Suze: on Inherited pre-tax IRAs, you need to listen to it 20 00:01:57,349 --> 00:02:01,800 Suze: because otherwise you are not going to understand the questions 21 00:02:01,809 --> 00:02:04,639 Suze: that have come in. You have to know what is 22 00:02:04,650 --> 00:02:09,910 Suze: an eligible designated beneficiary, a non eligible designated beneficiary. 23 00:02:10,248 --> 00:02:13,968 Suze: You need to know what RBD means. You need to 24 00:02:13,979 --> 00:02:19,408 Suze: know all of these things before you can understand the 25 00:02:19,419 --> 00:02:23,728 Suze: questions that have come in. So we had lots of 26 00:02:23,738 --> 00:02:27,858 Suze: questions come in. All right, we are, are, are you 27 00:02:27,869 --> 00:02:29,009 Suze: ready for this, KT? 28 00:02:29,018 --> 00:02:34,008 KT: I'm gonna try my best to clarify and simplify this 29 00:02:34,018 --> 00:02:35,518 KT: very complicated 30 00:02:36,220 --> 00:02:37,330 KT: conclusion. 31 00:02:37,699 --> 00:02:38,110 Suze: But I just 32 00:02:38,119 --> 00:02:41,139 Suze: want to say this is a thing 33 00:02:41,149 --> 00:02:42,829 KT: that you, you have to know this 34 00:02:43,740 --> 00:02:48,009 Suze: things. It's like you just do. All right, go. 35 00:02:48,339 --> 00:02:51,630 KT: OK. This is from Rebecca. She said, KT picked me. 36 00:02:51,639 --> 00:02:53,470 KT: This is a very short question. 37 00:02:54,160 --> 00:02:54,369 Suze: That's 38 00:02:54,380 --> 00:02:58,160 Suze: always a key, if you wanna get picked by KT 39 00:02:58,820 --> 00:03:02,220 KT: So Suze, at what age is my child no longer 40 00:03:02,229 --> 00:03:05,710 KT: a minor. My 18 year old who is still in 41 00:03:05,720 --> 00:03:08,029 KT: school was left to my husband's IRA 42 00:03:08,288 --> 00:03:12,039 KT: a few months ago, I was told by my CPA 43 00:03:12,240 --> 00:03:18,160 KT: that my son is not an eligible, designated beneficiary because 44 00:03:18,169 --> 00:03:21,029 KT: he's no longer a minor. He's 18 years old, Suze. 45 00:03:21,038 --> 00:03:22,080 KT: What can I do? 46 00:03:22,179 --> 00:03:27,679 Suze: I know so much confusion, right? Rebecca and everybody else 47 00:03:28,258 --> 00:03:31,198 Suze: in many states, you're no longer a minor once you 48 00:03:31,210 --> 00:03:34,279 Suze: become 18 years of age, but when it comes to 49 00:03:34,288 --> 00:03:35,479 Suze: an inherited 50 00:03:35,860 --> 00:03:41,589 Suze: IRA. All right. And for the definition to be an 51 00:03:41,600 --> 00:03:50,449 Suze: eligible designated beneficiary, you're considered a minor until your 21st birthday. 52 00:03:50,710 --> 00:03:53,979 Suze: The truth of the matter is your son is an eligible, 53 00:03:53,990 --> 00:03:57,539 Suze: designated beneficiary. So the first thing is, don't listen to 54 00:03:57,550 --> 00:04:01,039 Suze: your CPA in this case. All right, your CPA is 55 00:04:01,050 --> 00:04:02,279 Suze: just wrong. 56 00:04:02,600 --> 00:04:06,160 Suze: So, what can your son do? Well, I'm going to 57 00:04:06,169 --> 00:04:07,660 Suze: make the assumption 58 00:04:08,389 --> 00:04:15,699 Suze: that your husband or the son's father had not died 59 00:04:15,710 --> 00:04:22,500 Suze: on or after his RBD date. So therefore he is 60 00:04:22,510 --> 00:04:27,669 Suze: an eligible, your son is an eligible designated beneficiary where 61 00:04:27,678 --> 00:04:33,649 Suze: the decedent died prior to the RBD date. Therefore, he's 62 00:04:33,660 --> 00:04:35,220 Suze: 18 years of age 63 00:04:35,809 --> 00:04:40,170 Suze: and he can choose to either stretch it or take 64 00:04:40,178 --> 00:04:44,459 Suze: it out in 10 years. He can choose either one. 65 00:04:44,678 --> 00:04:47,850 Suze: What I would tell him to do is I would 66 00:04:47,859 --> 00:04:50,660 Suze: say choose the stretch method 67 00:04:51,529 --> 00:04:55,190 Suze: and then start taking a little bit out RMDs based 68 00:04:55,200 --> 00:04:58,630 Suze: on his life expectancy, little amount of money because he 69 00:04:58,640 --> 00:05:02,099 Suze: may need money later on. But even if you decide 70 00:05:02,109 --> 00:05:05,200 Suze: to stretch it, he can take out more if he 71 00:05:05,209 --> 00:05:10,380 Suze: wants to as well. However, he stretches it, but now 72 00:05:11,000 --> 00:05:14,678 Suze: in three years on his 21st birthday, he is no 73 00:05:14,690 --> 00:05:21,679 Suze: longer an eligible designated beneficiary. He is now a non eligible, 74 00:05:21,690 --> 00:05:28,320 Suze: designated beneficiary and normally a non eligible designated beneficiary 75 00:05:29,500 --> 00:05:33,690 Suze: whose decedent died prior to the RBD date would have 76 00:05:33,700 --> 00:05:38,839 Suze: to then switch to the 10 year rule period. However, 77 00:05:38,850 --> 00:05:44,320 Suze: because your son started to stretch it while he was 78 00:05:44,329 --> 00:05:47,000 Suze: an eligible designated beneficiary, 79 00:05:47,670 --> 00:05:52,268 Suze: he can continue to stretch it for 10 years until 80 00:05:52,279 --> 00:05:56,570 Suze: he is 31 years of age. So if it were 81 00:05:56,579 --> 00:06:00,769 Suze: my son, that's what I would want him to do again, 82 00:06:00,779 --> 00:06:03,529 Suze: he can take out larger sums if he wants. But 83 00:06:03,540 --> 00:06:07,170 Suze: why not let him stretch it for as long as 84 00:06:07,178 --> 00:06:11,409 Suze: he possibly can. That's what I would tell him to do. 85 00:06:11,619 --> 00:06:14,690 Suze: Very simple between now 86 00:06:15,209 --> 00:06:19,469 Suze: 18 and until he turns 21 he can just let 87 00:06:19,480 --> 00:06:23,659 Suze: it sit there in an inherited ira and then in 88 00:06:23,670 --> 00:06:28,149 Suze: three years, essentially, he will start to take out and 89 00:06:28,160 --> 00:06:33,149 Suze: stretch the money over his lifetime with RMDs but it 90 00:06:33,160 --> 00:06:34,618 Suze: has to be emptied 91 00:06:34,950 --> 00:06:39,769 Suze: 10 years after he has turned 21. Just that simple. 92 00:06:39,790 --> 00:06:39,859 Suze: All 93 00:06:39,869 --> 00:06:40,079 Suze: right KT. 94 00:06:40,540 --> 00:06:44,829 KT: OK. Next questions from James. Similar questions, Suze. I'm one 95 00:06:44,839 --> 00:06:48,239 KT: of those people who inherited an IRA from someone who 96 00:06:48,250 --> 00:06:53,140 KT: died in 2021. And that person had been taking RMDs 97 00:06:53,529 --> 00:06:57,790 KT: before they died. So now I need to have to 98 00:06:57,799 --> 00:07:02,760 KT: start taking RMDs next year. All right. So that's 2025. 99 00:07:03,140 --> 00:07:07,428 KT: So the question is, do I have till 2035 to 100 00:07:07,440 --> 00:07:09,220 KT: have the account clean? 101 00:07:09,230 --> 00:07:13,510 Suze: Yeah, here's the scoop. Everybody, James is talking about that. 102 00:07:13,519 --> 00:07:17,640 Suze: He inherited an IRA from someone who died in 2021 103 00:07:18,029 --> 00:07:23,589 Suze: who had already been taking his required minimum distributions before 104 00:07:23,600 --> 00:07:27,170 Suze: they died. He hasn't touched the account. He didn't have 105 00:07:27,179 --> 00:07:30,690 Suze: to because the law wasn't in effect yet because he 106 00:07:30,700 --> 00:07:34,730 Suze: was supposed to be taking RMDs But until they clarified 107 00:07:34,739 --> 00:07:37,049 Suze: the law, they postponed it. 108 00:07:37,500 --> 00:07:42,829 Suze: Now the law says starting in 2025 he has to 109 00:07:42,839 --> 00:07:47,279 Suze: take RMDs and he wants to know. All right, he 110 00:07:47,290 --> 00:07:50,459 Suze: can take RMDs, but he'll do it for 10 years. 111 00:07:50,470 --> 00:07:52,690 Suze: And then does he have to clean the account by 112 00:07:52,700 --> 00:07:57,859 Suze: 2035 10 years from next year? And the answer to 113 00:07:57,869 --> 00:08:01,920 Suze: that is no, you cannot do that because the clock 114 00:08:01,929 --> 00:08:05,809 Suze: started the year after death of the person who left 115 00:08:05,820 --> 00:08:07,279 Suze: you that inherited IRA, 116 00:08:07,679 --> 00:08:13,140 Suze: which was 2021. So you have only till 2031 to 117 00:08:13,149 --> 00:08:15,239 Suze: empty the IRA. 118 00:08:15,769 --> 00:08:18,329 KT: Again from Bruce. Same kind of question. 119 00:08:18,339 --> 00:08:18,619 Suze: A lot of 120 00:08:18,630 --> 00:08:19,850 Suze: questions for men. 121 00:08:20,589 --> 00:08:23,459 Suze: That's interesting. Well, were the women just were like, I'm not 122 00:08:23,470 --> 00:08:25,130 Suze: dealing with this. All right. Go on. 123 00:08:26,700 --> 00:08:30,760 KT: Bruce said, thank you for the great information on pre-tax 124 00:08:30,769 --> 00:08:36,549 KT: inherited retirement accounts. My mom passed away in June 2024 125 00:08:36,559 --> 00:08:39,710 KT: at 97 years old. Like your mommy, 126 00:08:40,119 --> 00:08:42,770 Suze: KT pop quiz pop quiz, 127 00:08:44,190 --> 00:08:51,349 Suze: right? Mommy died in 2010 at the age of 97. 128 00:08:51,369 --> 00:08:53,919 Suze: How old would she be now? 129 00:08:53,929 --> 00:08:54,169 KT: So 130 00:08:54,179 --> 00:08:57,010 KT: 97 and it's 14 years, 131 00:08:57,469 --> 00:08:58,609 KT: 100 and 11. 132 00:08:58,719 --> 00:09:00,939 Suze: That's my ding, ding, ding, ding, ding, no more quizzies 133 00:09:00,950 --> 00:09:01,849 Suze: for you. All right. 134 00:09:02,159 --> 00:09:02,369 KT: So, let 135 00:09:02,380 --> 00:09:05,690 KT: me finish Bruce's question. He said we now understand the 136 00:09:05,700 --> 00:09:12,419 KT: rules for pre-tax inherited IRAs. My question are RMDs required 137 00:09:12,429 --> 00:09:16,539 KT: over the 10 year rule for after tax. Roth inherited 138 00:09:16,549 --> 00:09:21,030 KT: IRAs currently, there's lots of confusion on this issue. 139 00:09:21,049 --> 00:09:21,619 Suze: I don't 140 00:09:21,630 --> 00:09:23,900 Suze: know why there's confusion on this issue. 141 00:09:24,270 --> 00:09:29,520 Suze: A Roth IRA does not have a required beginning day 142 00:09:29,530 --> 00:09:33,780 Suze: because no RMDs are required. So if this is a 143 00:09:33,789 --> 00:09:39,739 Suze: Roth IRA at a brokerage firm, for instance, then you 144 00:09:39,750 --> 00:09:44,849 Suze: do not have to take RMDs from it. However, you 145 00:09:44,859 --> 00:09:49,848 Suze: do have to wipe it clean by the end of 2034. 146 00:09:49,859 --> 00:09:52,039 Suze: So just leave it there, invest it, Bruce. 147 00:09:52,130 --> 00:09:54,659 Suze: And in 10 years from now you have to wipe 148 00:09:54,669 --> 00:09:57,978 Suze: it clean, but no RMDs have to be taken. All right. 149 00:09:58,359 --> 00:10:01,820 KT: OK. The next question is from Amy. She said my 150 00:10:01,830 --> 00:10:08,150 KT: 57 year old sister died unexpectedly in April of 2023. 151 00:10:08,609 --> 00:10:12,070 KT: She left me as the beneficiary of one of her IRAs. 152 00:10:12,080 --> 00:10:17,669 KT: I am 11 months younger. I understand I can stretch 153 00:10:17,679 --> 00:10:21,199 KT: the distributions over my lifetime. But when do I need 154 00:10:21,210 --> 00:10:24,150 KT: to take my first distribution? 155 00:10:24,159 --> 00:10:26,849 Suze: So obviously you haven't taken it yet. So you have 156 00:10:26,859 --> 00:10:33,460 Suze: to take your first RMDs by December 31st of 2024. 157 00:10:33,469 --> 00:10:34,109 Suze: All right. 158 00:10:34,590 --> 00:10:35,849 KT: All right. From Maria 159 00:10:36,299 --> 00:10:42,738 KT: Suze. Thank you for diving into this complicated topic. I 160 00:10:42,750 --> 00:10:44,840 KT: would have said, why did you have to even dive 161 00:10:44,849 --> 00:10:45,359 KT: in there? 162 00:10:46,359 --> 00:10:47,199 KT: All right. She said... 163 00:10:47,210 --> 00:10:50,020 Suze: The real question is why did they even change any 164 00:10:50,030 --> 00:10:50,770 Suze: of the rules, all right go on 165 00:10:51,340 --> 00:10:54,390 KT: All right. So Maria said, I have a very quick question. 166 00:10:54,830 --> 00:10:59,830 KT: In some situations, the IRA can be withdrawn over the 167 00:10:59,840 --> 00:11:02,619 KT: decedent's life expectancy. 168 00:11:02,630 --> 00:11:03,090 Suze: You know what a 169 00:11:03,099 --> 00:11:03,799 Suze: decedent is? 170 00:11:03,809 --> 00:11:04,390 KT: The person 171 00:11:04,400 --> 00:11:07,849 KT: that died. But the decedent is dead. 172 00:11:09,039 --> 00:11:13,549 KT: So how do we determine the decedent's life expectancy? 173 00:11:13,929 --> 00:11:14,108 Suze: So, 174 00:11:14,119 --> 00:11:17,109 Suze: that's a good question. So, here's the thing you have 175 00:11:17,119 --> 00:11:21,760 Suze: to know is that whatever the age was of the 176 00:11:21,770 --> 00:11:26,190 Suze: decedent when the decedent died, that is the age that 177 00:11:26,200 --> 00:11:31,159 Suze: you use to determine their life expectancy even though they're 178 00:11:31,169 --> 00:11:33,010 Suze: not here anymore. All right. Go on KT. 179 00:11:33,780 --> 00:11:35,569 KT: So this is from Nicholas. 180 00:11:36,210 --> 00:11:37,098 KT: My friend. Was... 181 00:11:37,950 --> 00:11:43,598 Suze: Ho do you know if they it like that? We'd always say "Neekolas" we're sorry if you 182 00:11:43,609 --> 00:11:44,760 Suze: don't pronounce it that way. 183 00:11:45,210 --> 00:11:49,439 KT: Ok. So my friend was a 46 year old single mom. 184 00:11:49,900 --> 00:11:56,500 KT: She left a 123,000 IRA to her four year old daughter. 185 00:11:56,809 --> 00:12:00,880 KT: Now given I am the guardian, I have no idea 186 00:12:00,890 --> 00:12:05,098 KT: what to do. She also had a term insurance policy 187 00:12:05,109 --> 00:12:10,510 KT: as well for $250,000. So no money is needed from 188 00:12:10,520 --> 00:12:11,460 KT: the IRA. 189 00:12:11,780 --> 00:12:15,580 KT: And even though I'm really great with money, thanks to you, 190 00:12:15,700 --> 00:12:20,500 KT: I am now totally confused and free. So what does 191 00:12:20,510 --> 00:12:23,460 KT: he do to help? Um, make sure the four year 192 00:12:23,469 --> 00:12:25,358 KT: old daughter is safe and secure. 193 00:12:25,369 --> 00:12:31,549 Suze: Obviously, Nicholas because your friend died before her RBD date, 194 00:12:31,919 --> 00:12:35,599 Suze: which is the date required to start taking your required 195 00:12:35,609 --> 00:12:40,080 Suze: minimum distributions. And her daughter is a minor 196 00:12:40,390 --> 00:12:45,659 Suze: that makes her child an eligible designated beneficiary that can 197 00:12:45,669 --> 00:12:51,250 Suze: stretch the distributions over her life expectancy. However, once the 198 00:12:51,260 --> 00:12:55,520 Suze: daughter turns 21 she is no longer a minor. 199 00:12:55,830 --> 00:12:59,210 Suze: So she will continue then to take the RMDs based 200 00:12:59,219 --> 00:13:03,679 Suze: on her life expectancy for 10 more years than at 201 00:13:03,690 --> 00:13:06,770 Suze: the age of 31. She'll have to wipe whatever is 202 00:13:06,780 --> 00:13:10,789 Suze: left in there clean. But remember you can take money 203 00:13:10,799 --> 00:13:15,250 Suze: out for her, the daughter any time during that period. 204 00:13:15,260 --> 00:13:16,830 Suze: It doesn't matter. All right. 205 00:13:17,299 --> 00:13:21,210 KT: OK. So Suze listen to this one. This is from Gina. 206 00:13:21,219 --> 00:13:21,809 KT: She said, 207 00:13:22,440 --> 00:13:24,339 KT: KT, you have to pick me. 208 00:13:24,349 --> 00:13:24,450 Suze: I picked you! 209 00:13:27,390 --> 00:13:30,989 KT: This is a serious one. So Gina says, why? Because 210 00:13:31,000 --> 00:13:36,460 KT: I've never heard this question asked before, but more importantly, 211 00:13:36,469 --> 00:13:40,429 KT: I really, really need Suze's advice. So Gina has a 212 00:13:40,440 --> 00:13:45,260 KT: sad situation here. My older brother was the non eligible, 213 00:13:45,270 --> 00:13:49,539 KT: designated beneficiary of an inherited IRA. 214 00:13:49,940 --> 00:13:55,030 KT: The owner of the IRA died in January of 2020. 215 00:13:55,280 --> 00:14:00,919 KT: He had not started taking his RMDs. My brother had 216 00:14:00,929 --> 00:14:04,280 KT: 10 years to wipe the account clean. Here's where it 217 00:14:04,289 --> 00:14:08,979 KT: gets difficult, Suze, Gina said my older brother was recently 218 00:14:08,989 --> 00:14:13,200 KT: killed in a car crash and now I am the 219 00:14:13,210 --> 00:14:17,640 KT: successor beneficiary of this inherited IRA. 220 00:14:18,239 --> 00:14:21,510 KT: I'm only three years younger than my brother. So here's 221 00:14:21,520 --> 00:14:22,349 KT: the question. 222 00:14:23,219 --> 00:14:27,809 KT: Am I now an eligible designated beneficiary? And if I am, 223 00:14:27,820 --> 00:14:31,570 KT: can I stretch the account over my life expectancy? 224 00:14:32,260 --> 00:14:40,570 Suze: So interesting question. Remember everybody to be an eligible designated beneficiary, 225 00:14:41,030 --> 00:14:45,809 Suze: you have to be a minor child of the decedent 226 00:14:46,109 --> 00:14:50,969 Suze: or a surviving spouse, a disabled person, a chronically ill 227 00:14:50,979 --> 00:14:52,650 Suze: person or 228 00:14:53,140 --> 00:14:58,520 Suze: not more than 10 years younger than the decedent or 229 00:14:58,530 --> 00:15:01,159 Suze: you could be any age older than the decedent, but 230 00:15:01,169 --> 00:15:06,599 Suze: the decedent isn't the beneficiary. It's the owner of the 231 00:15:06,609 --> 00:15:11,760 Suze: original IRA. This does not make this person an eligible 232 00:15:11,770 --> 00:15:16,960 Suze: designated beneficiary number one. So they cannot stretch it over 233 00:15:16,969 --> 00:15:22,599 Suze: their lifetime. So as a successor beneficiary in this case, 234 00:15:23,789 --> 00:15:28,159 Suze: and the 10 year rule had been chosen, Gina has 235 00:15:28,169 --> 00:15:32,789 Suze: to finish the 10 years and then empty the account. 236 00:15:32,799 --> 00:15:37,260 Suze: So therefore the 10 years started in 2020. So by 237 00:15:37,270 --> 00:15:43,799 Suze: 2030 Gina, all money in this account has to be gone. 238 00:15:43,809 --> 00:15:48,210 Suze: And that's just how a successor beneficiary in this case 239 00:15:48,219 --> 00:15:49,359 Suze: would work. 240 00:15:50,190 --> 00:15:50,960 Suze: KT, what else 241 00:15:50,969 --> 00:15:51,270 Suze: you got 242 00:15:51,400 --> 00:15:54,890 KT: Ok. So Maureen sent this one and it's simple question. 243 00:15:55,260 --> 00:15:59,969 KT: My grandma left her Ira to her estate which is me. 244 00:16:00,400 --> 00:16:04,559 KT: She was not taking her RMDs. And my question is, 245 00:16:04,570 --> 00:16:09,539 KT: am I a non eligible, designated beneficiary and just have 246 00:16:09,549 --> 00:16:12,729 KT: to withdraw the money within 10 years. 247 00:16:13,179 --> 00:16:15,559 Suze: Do you know the answer to that? I actually answered 248 00:16:15,570 --> 00:16:18,679 Suze: this question on Sunday as an example. Do you know 249 00:16:18,690 --> 00:16:19,280 Suze: the answer? 250 00:16:19,849 --> 00:16:20,700 KT: Yes. 251 00:16:20,799 --> 00:16:21,859 Suze: What's the answer? 252 00:16:22,739 --> 00:16:23,559 KT: Yes. 253 00:16:26,020 --> 00:16:29,599 KT: Yes. She has to withdraw the money within 10 years. 254 00:16:30,479 --> 00:16:31,309 Suze: Positive. 255 00:16:31,559 --> 00:16:35,700 KT: No, definitely, I'm not positive on this 256 00:16:36,500 --> 00:16:39,869 Suze: Maureen. Here's the scoop and I talked about this on 257 00:16:39,880 --> 00:16:45,969 Suze: Sunday when somebody leaves their IRA to their estate, then 258 00:16:45,979 --> 00:16:50,820 Suze: that's called a non designated beneficiary. They did not designate 259 00:16:50,830 --> 00:16:52,059 Suze: a beneficiary 260 00:16:52,289 --> 00:16:57,830 Suze: which is a person, they designated an estate, a charity 261 00:16:57,840 --> 00:17:03,739 Suze: or something like that. Therefore you have to wipe it 262 00:17:03,750 --> 00:17:09,040 Suze: clean within five years period because she didn't start her 263 00:17:09,050 --> 00:17:13,079 Suze: RMDs and everything. You have five years to wipe it clean. 264 00:17:13,089 --> 00:17:14,670 Suze: Not 10. 265 00:17:16,239 --> 00:17:17,579 Suze: What do you think of that, Katie? 266 00:17:18,040 --> 00:17:18,060 KT: Oh, 267 00:17:18,069 --> 00:17:22,819 KT: that's good. I didn't know that. I didn't know that. No. 268 00:17:22,829 --> 00:17:26,060 KT: Five years. 10, I mean, this is a topic that 269 00:17:26,069 --> 00:17:28,319 KT: is really, really complicated. 270 00:17:28,709 --> 00:17:31,300 Suze: Stop saying complicated. Wait a minute. You got any more 271 00:17:31,310 --> 00:17:31,880 Suze: for me. 272 00:17:31,890 --> 00:17:32,219 KT: How 273 00:17:32,229 --> 00:17:33,339 KT: long do I have 274 00:17:33,584 --> 00:17:38,574 KT: to roll my deceased spouse's IRA into my own? 275 00:17:38,584 --> 00:17:41,135 Suze: There's no time limit. You can do it any time 276 00:17:41,145 --> 00:17:45,594 Suze: you want. And that's essentially what all these final regulations 277 00:17:45,834 --> 00:17:48,935 Suze: talked about that it's now open ended. All right. 278 00:17:49,709 --> 00:17:53,329 KT: All right. Again, my spouse died and then this is 279 00:17:53,339 --> 00:17:56,910 KT: from Trish. My spouse died and when I went to 280 00:17:56,920 --> 00:18:01,439 KT: his employer's HR people to ask if I could just 281 00:18:01,449 --> 00:18:05,349 KT: leave the money there and do a stretch. They said 282 00:18:05,359 --> 00:18:10,540 KT: their company only allows the 10 year option. Now, that's interesting. 283 00:18:10,699 --> 00:18:12,839 Suze: So let me just say something to all of you 284 00:18:12,849 --> 00:18:17,409 Suze: before I even answer this. If you have inherited 285 00:18:17,839 --> 00:18:22,899 Suze: a retirement account, that is at a plan, meaning an employer, 286 00:18:23,660 --> 00:18:28,719 Suze: your best bet hands down is to just do an 287 00:18:28,729 --> 00:18:33,689 Suze: inherited IRA with it, roll it out of there, get 288 00:18:33,699 --> 00:18:39,689 Suze: it out of the employer's hands. So if it's left 289 00:18:39,699 --> 00:18:42,839 Suze: at the employers like Trish is saying 290 00:18:43,170 --> 00:18:48,170 Suze: some employers will allow you with an inherited account to 291 00:18:48,180 --> 00:18:55,030 Suze: do a stretch as well as your choice. 10 years. However, 292 00:18:55,040 --> 00:18:58,639 Suze: there are many companies that will only allow the 10 293 00:18:58,650 --> 00:19:01,739 Suze: year option. And again, the 10 year option is you 294 00:19:01,750 --> 00:19:04,530 Suze: don't have to take any money out for 10 years. 295 00:19:04,540 --> 00:19:07,069 Suze: But the end of the 10th year, it all has 296 00:19:07,079 --> 00:19:08,429 Suze: to come out. 297 00:19:09,239 --> 00:19:12,339 Suze: There is a difference between an IRA 298 00:19:13,089 --> 00:19:15,969 Suze: and what a plant account will allow you to do 299 00:19:15,979 --> 00:19:21,319 Suze: in many different circumstances. This is just one of them, everybody, 300 00:19:21,479 --> 00:19:26,449 Suze: which is why I am suggesting that if you inherit 301 00:19:27,119 --> 00:19:31,640 Suze: a retirement account that's at an employer's, it's called a 302 00:19:31,650 --> 00:19:37,849 Suze: planned account, you best just do an inherited IRA rollover 303 00:19:37,859 --> 00:19:42,329 Suze: with it far better off because again, this is just 304 00:19:42,339 --> 00:19:46,410 Suze: one of the differences that employers will allow you to 305 00:19:46,420 --> 00:19:50,930 Suze: do versus what you could do on your own. All right. 306 00:19:51,400 --> 00:19:55,139 KT: Ok, Suze, last Sunday, you said you would tell everyone 307 00:19:55,150 --> 00:20:00,139 KT: the definition of critically ill and disabled, but you forgot 308 00:20:00,150 --> 00:20:00,989 KT: to tell everyone. 309 00:20:01,329 --> 00:20:06,020 Suze: I did forget about that. I ran out of time. 310 00:20:06,089 --> 00:20:07,180 KT: So tell him now. 311 00:20:07,369 --> 00:20:12,280 Suze: So what you need to know to qualify as disabled. 312 00:20:12,290 --> 00:20:16,849 Suze: So then you're allowed to become an eligible, designated beneficiary. 313 00:20:17,290 --> 00:20:22,479 Suze: It would be nice if you had social security disability 314 00:20:22,560 --> 00:20:26,409 Suze: because if you're getting social security disability, that's pretty much 315 00:20:26,420 --> 00:20:31,069 Suze: a confirmation of it or get your doctor to confirm 316 00:20:31,410 --> 00:20:35,160 Suze: that you don't have what it takes to engage in 317 00:20:35,170 --> 00:20:39,560 Suze: what they call substantial gainful activity due to long term 318 00:20:39,569 --> 00:20:45,079 Suze: and indefinite impairment. So that's essentially what needs to happen 319 00:20:45,089 --> 00:20:47,030 Suze: for you to be disabled 320 00:20:47,300 --> 00:20:51,359 Suze: to be chronically ill. It would be great if a 321 00:20:51,369 --> 00:20:58,280 Suze: licensed healthcare professional certified that you are chronically ill and 322 00:20:58,290 --> 00:21:01,589 Suze: there's a thing called activities of daily living, there are 323 00:21:01,599 --> 00:21:03,189 Suze: six or seven of them 324 00:21:03,550 --> 00:21:07,000 Suze: that if you can't do them, then in essence, you're 325 00:21:07,010 --> 00:21:11,469 Suze: chronically ill. So it has to be confirmed that you 326 00:21:11,479 --> 00:21:16,089 Suze: cannot do at least two of the daily living activities 327 00:21:16,099 --> 00:21:22,409 Suze: such as dressing yourself, transferring yourself without assistance. So that's 328 00:21:22,420 --> 00:21:26,130 Suze: what qualifies just that simple. All right. 329 00:21:26,510 --> 00:21:30,369 KT: All right. Next is from Danny. Suze, can you just 330 00:21:30,380 --> 00:21:32,410 KT: as simply as possible? 331 00:21:32,550 --> 00:21:33,459 Suze: I don't think so 332 00:21:34,540 --> 00:21:38,640 KT: as simply as possible. Tell us what happens if the 333 00:21:38,650 --> 00:21:44,560 KT: beneficiary dies, what the successor beneficiary can and cannot do. 334 00:21:45,229 --> 00:21:47,260 KT: Keep it simple. Keep it simple. KISS. 335 00:21:47,829 --> 00:21:51,380 Suze: The truth of the matter is KT, I cannot keep 336 00:21:51,390 --> 00:21:56,520 Suze: it simple. That's another podcast. Seriously all unto itself because 337 00:21:56,614 --> 00:21:58,405 Suze: a lot of it has to do with, was it 338 00:21:58,415 --> 00:22:02,204 Suze: before the Secure Act after the Secure Act? It is 339 00:22:02,214 --> 00:22:07,505 Suze: so complicated. No, I can't keep it simple. But one 340 00:22:07,515 --> 00:22:10,574 Suze: day I will do, I'm off this topic now for 341 00:22:10,584 --> 00:22:13,055 Suze: a while. Just so you all know everybody. But one 342 00:22:13,064 --> 00:22:19,464 Suze: day I will do an entire podcast just on that topic. 343 00:22:19,474 --> 00:22:22,504 Suze: So complicated. Oh my God. 344 00:22:23,319 --> 00:22:27,180 Suze: This, this is the type of a podcast along with 345 00:22:27,189 --> 00:22:32,910 Suze: last week's podcast that is really a master class in 346 00:22:33,030 --> 00:22:39,260 Suze: inherited pre-tax retirement accounts. This is the type of podcast 347 00:22:39,270 --> 00:22:41,010 Suze: that I want you to mark 348 00:22:41,449 --> 00:22:44,790 Suze: you take down the number. What number this podcast is 349 00:22:44,800 --> 00:22:49,109 Suze: last Sunday's podcast. You take notes, you go over it 350 00:22:49,119 --> 00:22:52,389 Suze: again and again and if this doesn't apply to you 351 00:22:52,400 --> 00:22:56,359 Suze: right now. All right. But trust me one day, the... 352 00:22:57,280 --> 00:23:00,069 KT: Keep the date so you can go back and listen 353 00:23:00,079 --> 00:23:02,180 KT: to these rules and hopefully they won't change. 354 00:23:02,579 --> 00:23:05,660 Suze: But even if it doesn't apply to you right now, 355 00:23:05,670 --> 00:23:07,270 Suze: one day it will. 356 00:23:07,739 --> 00:23:12,030 Suze: So even though your head may be spinning, if you 357 00:23:12,040 --> 00:23:17,530 Suze: go over this enough and long enough, you will understand 358 00:23:17,540 --> 00:23:19,920 Suze: exactly what I'm talking about. 359 00:23:20,339 --> 00:23:23,359 KT: Ok. This next one's from Joyce. She said my deceased 360 00:23:23,369 --> 00:23:26,280 KT: spouse had multiple retirement accounts. 361 00:23:27,020 --> 00:23:30,919 KT: He had named our trust as the beneficiary and now 362 00:23:30,930 --> 00:23:34,640 KT: I'm the trustee of our trust. So here's the question 363 00:23:34,969 --> 00:23:39,390 KT: his employer is requesting, I give them the actual trust documents, 364 00:23:39,400 --> 00:23:43,030 KT: but the brokerage firm is not. So what's up, Suze? 365 00:23:43,199 --> 00:23:45,660 Suze: So what's up is, do you remember KT a few 366 00:23:45,670 --> 00:23:49,510 Suze: seconds ago? I said it's very different if you have 367 00:23:49,520 --> 00:23:53,729 Suze: an inherited IRA or you roll over an inherited IRA 368 00:23:53,739 --> 00:23:59,510 Suze: at a brokerage firm. Versus if it's at a plan, 369 00:23:59,520 --> 00:24:01,270 Suze: which means at an employer, 370 00:24:01,770 --> 00:24:07,280 Suze: many, many differences in employer plan, which is a 401k 371 00:24:07,290 --> 00:24:13,060 Suze: 403b or TSP, they are going to require documentation. An 372 00:24:13,069 --> 00:24:16,750 Suze: IRA does not at a brokerage firm. Also, I have 373 00:24:16,760 --> 00:24:20,109 Suze: to say now that I'm thinking about this. If you 374 00:24:20,119 --> 00:24:23,189 Suze: are chronically ill or disabled, 375 00:24:23,510 --> 00:24:29,390 Suze: a planned retirement account, your employer is gonna require documentation 376 00:24:29,459 --> 00:24:33,819 Suze: that you are in fact disabled or chronically ill again 377 00:24:33,829 --> 00:24:37,919 Suze: at a brokerage firm or wherever it is outside. When 378 00:24:37,930 --> 00:24:40,689 Suze: you roll it, they do not. So 379 00:24:40,880 --> 00:24:44,579 Suze: then I am going to reiterate if you really want 380 00:24:44,589 --> 00:24:49,020 Suze: to make your life easy. If you inherit A 401k 381 00:24:49,030 --> 00:24:55,510 Suze: 403b TSP, do not leave it at the place of employment. 382 00:24:55,520 --> 00:24:58,140 Suze: Do a roll over with it. 383 00:24:59,060 --> 00:25:03,540 Suze: You now know the essential information or the answers to 384 00:25:03,550 --> 00:25:08,968 Suze: these questions that came in. I'm sure KT chose many 385 00:25:08,979 --> 00:25:13,719 Suze: of them because they are complicated. They're not really just simple. 386 00:25:13,729 --> 00:25:16,719 Suze: Can I do this? Can I do that? Which last 387 00:25:16,729 --> 00:25:21,479 Suze: Sunday's podcast would absolutely tell you what you can and 388 00:25:21,489 --> 00:25:22,800 Suze: cannot do 389 00:25:23,189 --> 00:25:27,880 Suze: this podcast today was a technical one, but one that 390 00:25:27,890 --> 00:25:31,030 Suze: the majority of you will need to know because almost 391 00:25:31,040 --> 00:25:35,420 Suze: every single thing that KT asked via these emails, you 392 00:25:35,430 --> 00:25:41,889 Suze: will come up against these situations. So, KT until this Sunday, 393 00:25:43,199 --> 00:25:44,900 Suze: I know KT, if you could only, can see her face... 394 00:25:44,920 --> 00:25:45,030 KT: Can you 395 00:25:45,040 --> 00:25:47,829 KT: make Sunday like a really nice school. 396 00:25:49,709 --> 00:25:52,260 Suze: Well, we'll see what happens if the markets keep crashing 397 00:25:52,270 --> 00:25:54,660 Suze: like they're crashing. I'm not sure what it's gonna be. 398 00:25:54,670 --> 00:25:59,689 Suze: But anyway, what do you want to tell people? Right. 399 00:25:59,959 --> 00:26:01,050 Suze: So there's 400 00:26:01,750 --> 00:26:04,119 KT: only one thing you need to remember and that is 401 00:26:04,130 --> 00:26:04,729 KT: this 402 00:26:05,560 --> 00:26:06,430 KT: people first, 403 00:26:06,439 --> 00:26:07,709 Suze: whether they're alive or dead, 404 00:26:07,859 --> 00:26:08,139 KT: then money 405 00:26:08,819 --> 00:26:12,369 Suze: Yes. Whether it's a Roth IRA, a retirement account, no 406 00:26:12,380 --> 00:26:16,389 Suze: matter what you have to know about it. That's right. 407 00:26:16,400 --> 00:26:18,958 Suze: And if you do everything that we've told you, you 408 00:26:18,969 --> 00:26:26,750 Suze: stay safe, stay healthy. You will be what? Unstoppable. Bye bye, everybody.