A 67-Year-Old With a $620,000 Inherited 401(k) Faces an $80,000 Tax Bomb Most Heirs Do Not See Coming Quick Read – For a 67-year-old still pulling in a high W-2, it can quietly become one of the most expensive tax events of her life.
The real trap is the 10-year clock the IRS attaches to it. – Under the SECURE Act, every dollar must come out within 10 years, and every dollar lands on her tax return as ordinary income. – Are you ahead, or behind on retirement?
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Inheriting a parent’s retirement account sounds like a windfall. For a 67-year-old still pulling in a high W-2, it can quietly become one of the most expensive tax events of her life. The real trap is the 10-year clock the IRS attaches to it.