What can I do with an Inherited Roth IRA?


inherited Roth's

this is the stretch IRA concept google

stretch IRA especially stretch Roth

here's how Roth works if you inherit to

Roth you can take money out of it

tax-free immediately right on the cue

Thank You viv and because of that I'm

not only gonna mention the bathroom

incident 19 more times instead of 25 so

you're earning your way out of this

she's a good sport you notice I don't do

that with again latin women so if you

inherit a Roth there's normally to

qualify for tax-free distributions from

a Roth it has to have existed for five

years and you have to be 59 and a half

or older if you inherit a Roth at any

age you could be four you can take money

out tax-free for the rest of your life


in fact you're required to there's

what's called required minimum

distributions and inherited Roth unlike

a regular Roth you are forced to

withdraw the money how do they come up

with the formula they take your life

expectancy based on actuarial tables and

say you got to take out this much per

year so let's think about two planning

angles on that first of all let's say

you're considerably under fifty nine and

a half in other words it's going to be

awhile until you can pull money out of

your Roth tax-free and you may not want

you may want to just keep growing it

you're considerably under fifty nine and

a half arrange to inherit to Roth even

if it only has two thousand dollars in

it what can you do with it we've talked

about what you can do with only two

thousand bucks

arrange to inherit a Roth now there's a

couple of ways to do it in my family

it's easy well part of it is there are

really two criteria do you hate the

government right in my family we got

plenty and this is the this is the

delicate part and I think you're not

going to live very long that could be a

real buzzkill at dinner but I've had

clients do it usually with really I mean

relatives who are very well-off very


savy would engage in this kind of

planning relatives in their late 80s or

90s inherit a Roth I I don't recommend

this I have seen some people do it they

took it a little far I thought they

actually trolled the old folks homes

they found a reason to pay someone

compensation for some consulting I don't

want to know and then they put just 500

bucks in the Roth and then sat and

waited for that person to kick off and

they had their $500 seed little seed but

they could take money from immediately

and started growing it what's another

turnaround on that how do you pass your

assets on passing a Roth whoever gets it

should love you a lot and you pass it to

someone very young you got to coordinate

with estate tax issues and

generation-skipping tax but you pass it

to someone very young why because the

younger they are the longer the account

lasts right if you're four years old

let's say your expected life is 90

that's 90 years tacked on to the

existence of that Roth IRA where if

someone inherits that when they're there

80 and not so much right questions given

you hopefully a lot to think about

guys I don't want to do any more rentals

outside of these accounts and I'm

especially focused on the 401k I

practice what I preach