There are a lot of decisions to make when a loved one passes on. A lot of loose ends to tie, things to liquidate, bills to pay and emotions to deal with. One thing you can do for your kids that will be inheriting your IRA accounts is to teach them about stretching. No, I don’t mean physically stretching, I mean stretching out your IRA.
When a non-spouse inherits an IRA account, they have to start taking withdrawals right away. As a non-spouse, one withdrawal option you have is to stretch those withdrawals over your lifetime vs. in one lump sum. Why is stretching better? Taxes are the biggest plus to stretching out the withdrawals vs. taking a lump sum. Any withdrawals from the Inherited IRA will be taxable. By using your life expectancy, you spread out the addition to your taxable income each year and the corresponding tax, to a more manageable amount. You can allow the balance to grow tax deferred, controlling your cash flow and tax rate.
Stretching, in most any form, can be good for the mind, the soul, and in this case, your pocket.

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