✉news BusinessPersonal Finance first seen 17 h ago, last 1 h ago, peak #3

Inherited 401(k) Withdrawals Push Heirs Into Higher Tax Brackets

Original: A Retiree Who Dies at 80 With $600,000 in a 401(k) Leaves a Son Earning $150,000 Ten Years to Empty It, and About $60,000 a Year Lands in His 24% Bracket. Converting $40,000 a Year From 65 to 73 Would Have Moved Most of It Out at 12%

A personal finance analysis lays out the tax trap of leaving a large 401(k) to an heir. A son earning $150,000 who inherits his father's $600,000 balance after the father dies at 80 has roughly ten years to empty the account under the rules for inherited retirement accounts. Withdrawals of about $60,000 a year land in his 24% federal bracket. The piece argues the father could have converted about $40,000 a year from age 65 to 73, moving most of the money out at a 12% rate instead.

Why now: Debates over Roth conversions and inherited IRA rules are timely as more retirees face decisions about tax-efficient ways to pass on retirement savings

401(k)Roth conversion24/7 Wall St.

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• A Retiree Who Dies at 80 With $600,000 in a 401(k) Leaves a Son Earning $150,000 Ten Years to Empty It, and About $60,000 a Year Lands in His 24% Bracket. Converting $40,000 a Year From 65 to 73 Would Have Moved Most of It Out at 12% · 24/7 Wall St.

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