What Is An Inherited IRA? And Why Is It Bad?

Knowledge is power. And sadly, most online “knowledge” is common sense. Stuff that makes you nod your head in agreement, thinking “I knew that!” A fun ego boost. But not much else.

Which is why today’s article is important.

I’m covering a seemingly boring and complex topic. But one that’s so powerful, simply knowing about it can save you tens of thousands of dollars.

What is this incredible secret?

The “Inherited IRA.”

Or more specifically, how inherited IRAs bleed the inheritor with astronomical penalties and taxes.

Worst of all, inherited IRAs sound safe.

So, they’re common investment vehicles.

Ones that you, your parents, or another close relative may have.

Here’s everything you need to know…

What Is An Inherited IRA?

Traditional IRAs are good. The standard IRA allows you to invest your money tax deferred. And a Roth IRA lets you invest after-tax income, allowing you to grow these funds tax-free.

But an inherited IRA has no tax-breaks for the inheritor.

In fact, the person receiving the money pays astronomical taxes and penalties.