retirement

8 ways to go wrong with an inherited IRA

Retirement » 8 ways to go wrong with an inherited IRA

Seek counsel at the outset
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Seek counsel at the outset © Gwoeii/Shutterstock.com

Seek counsel at the outset

An inherited individual retirement account lies at the tricky three-way intersection of estate planning, financial planning and tax planning. With do-overs granted exclusively by Internal Revenue Service fiat, one wrong decision can lead to expensive consequences.

Attorney Natalie Choate advises IRA beneficiaries to do nothing until they've met with a financial adviser who can explain their options.

"The worst thing to do would be to cash out the plan, put it in your account, and then go see an adviser and say, 'Now what?'" says Choate, the author of the retirement-plan guide "Life and Death Planning for Retirement Benefits."

At that point, you're up the proverbial creek. Before that happens, learn these eight must-know secrets of inherited IRAs.

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