In 2020, the Secure Act gave non-spouse heirs 10 years to withdraw funds from inherited IRAs, instead of the previous lifetime withdrawals. However, there are no penalties for 2024 missed withdrawals.
Before withdrawing funds, consider your financial situation and other factors that may impact your tax liability, such as your retirement date and potential changes in tax brackets after 2025.
Under the Secure Act, some heirs must deplete inherited retirement accounts within 10 years, facing penalties if they don't. However, to address confusion, the IRS has delayed penalties for missed withdrawals until 2024. While this may seem convenient, it could lead to larger future distributions and higher taxes. Experts advise weighing one's financial situation and considering starting withdrawals now, especially with potential tax bracket changes on the horizon.
