Individual Retirement Accounts, or IRAs, are quite popular – which means you might inherit one someday. But what should you do with it?
First, be aware that you will be required to take at least minimum distributions each year. Depending on what type of IRA you’ve inherited, these amounts may be taxable, so before you start accepting them, consult with your tax advisor.
Of course, you could take out more than the required minimum and use the extra money to help with your other investment goals, but again, you’ll need to consider tax consequences.
Also, you are free to change the investments within your inherited IRA to fit more closely with your risk tolerance, time horizon and long-term goals.
Finally, you may want to consult with a financial professional to determine how your newly inherited IRA fits in to your overall financial strategy. For example, the added income from required distributions could change your retirement calculations.
To respect your inheritance, you’ll want to get the most out of your IRA for as long as you can – so think carefully about what steps to take.
This article was written by Edward Jones for use by your local Edward Jones Financial Advisor.
Edward Jones, its employees and financial advisors cannot provide tax or legal advice.