Don’t Let a Tax Surprise Turn a Blessing Into a Burden

What Every Professional Woman Should Know Before Taking a Distribution

Wealth Transfer Isn’t Just About Receiving Money. It’s About Making Smart Decisions.

Many women spend years helping aging parents navigate retirement, healthcare decisions, and estate planning.

Then one day, the roles shift.

A parent passes away. A spouse dies unexpectedly. A loved one leaves behind an IRA.

Along with grief comes a new responsibility: deciding what to do with inherited retirement assets.

Unfortunately, many beneficiaries make costly tax mistakes before they fully understand their options.

An inherited IRA can be one of the most valuable assets you receive. But without a thoughtful strategy, a significant portion of that inheritance could end up going to the IRS instead of helping you achieve your financial goals.

“The biggest mistake isn’t inheriting an IRA. It’s inheriting one without a strategy.””  ~Zaneilia Harris, CFP®

 

What Changed?

The SECURE Act Rewrote the Rules

For years, beneficiaries could stretch IRA distributions over their lifetime.

Today, most non-spouse beneficiaries must fully distribute inherited IRA assets within ten years.

While that sounds straightforward, it creates a new challenge:

How do you withdraw the money while minimizing taxes?

The answer depends on your age, income, tax bracket, retirement timeline, and overall financial plan.

Before You Take A Dollar Out Of An Inherited Ira, Ask:

• ✓ Who was the original owner?
• ✓ Am I a spouse or non-spouse beneficiary?
• ✓ Is this a Traditional IRA or Roth IRA?
• ✓ What tax bracket am I currently in?
• ✓ Could withdrawals affect Medicare premiums or future taxes?
• ✓ Do I need the money today—or can I let it continue growing?

Why Professional Women Need A Different Approach

Many of the women we serve have spent decades building successful careers.

They are often senior leaders approaching retirement.

An inherited IRA frequently arrives during peak earning years.

That’s exactly what creates the tax challenge.

Taking a large distribution while you’re earning your highest income could push you into a higher tax bracket and significantly increase your tax bill.

The goal isn’t simply accessing the money.

The goal is preserving as much of it as possible.

“A thoughtful distribution strategy can potentially save thousands of dollars in taxes over the life of an inherited IRA.”

The 10-Year Window Is A Planning Opportunity

Many beneficiaries make assumptions on taking a distribution immediately or whether waiting until Year 10 to withdraw everything at once is the best option.

That choice may be one of the most expensive decisions they can make.

Instead, strategic withdrawals during lower-income years may help smooth taxes over time.

Potential opportunities may include:

• Career transitions
• Sabbaticals
• Early retirement years
• Years before Social Security begins
• Years before Required Minimum Distributions (RMDs)

The right approach depends on your unique circumstances.

Common Inherited Ira Mistakes

❌ Taking a lump-sum distribution immediately

❌ Waiting until Year 10 without a tax strategy

❌ Missing required distribution deadlines

❌ Ignoring Roth conversion opportunities

❌ Failing to coordinate IRA distributions with retirement planning

A Legacy Deserves A Plan

For many women, an inheritance represents far more than money.

It’s the culmination of someone’s lifetime of work, sacrifice, and love.

The question isn’t simply:

“How quickly can I access the money?”

The better question is:

“How can I honor this legacy while making the smartest financial decisions for my future?”

A carefully designed distribution strategy can help protect your inheritance, reduce taxes, and strengthen your long-term financial independence.

And that’s exactly why inherited IRA planning deserves professional guidance.

Schedule an exploratory call at www.hhwealth.com. Click here to start the conversation with Harris & Harris Wealth Management.