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Subject:  Re: Order of paying off? Date:  10/18/2013  4:18 PM
Author:  JAFO31 Number:  307365 of 312189

hrse: "I did not mention it, but part of my retirement money includes $40,000 in a Beneficiary IRA, which I now own after my mother passed. I am taking the min witdraw most years.***
I consider this as a back-up of last resort to our E-fund.

. . .

*** incase any one was concerned, and I know you are because it's what we do: after her accident I sold a big chunk of what was in there, because I did not want money I might need stuck in NFLX, APPL or other stocks that we all know could get cut in half with no warning. We did make a significant withdraw in Feb after our E-fund was drained. Now that we are back on a budget, this fund is back to 100% stocks."

First, my condolences on your mother's death.

Second, you did not mention when your mother died, but from what you have written, I am concerned that you may not understand the rules with respect to inherited IRAs.

For any IRA inherited from a non-spouse, the beneficiary must withdraw all the funds from the IRA within five years after the year of the death of the deceased, unless the non-spousal IRA heir withdraws a minimum amount each year (based on the age of the heir), starting by Dec. 31 of the year after the IRA owner died (regardles of traditional IRA or a Roth). See, IRS Publication 590, “Individual Retirement Arrangements (IRAs)".

It makes me nervous to read "I am taking the min withdraw most years". The "stretch" rule (for withdrawals over lifetime of heir) requires RMDs every year, otherwsie you default to the five year rule.

I am doing this post largely from memory, but I know that I have the gist of it correct.

Good luck, JAFO
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