Someone who values you may designate you as the beneficiary of a retirement account he owns. This is considered an inherited IRA and you can keep it as such. You’ll need to withdraw some money each year based upon your age, but the younger you are the less you need withdraw. That money is taxable each year on your current income taxes but it is not penalized as money withdrawn from your own IRA before the age of 59 1/2 frequently is. You can treat the inherited IRA like an investment and keep it invested in ways that earn high returns. You can change the investments as you think best. It’s quite flexible and a great long term gift if you handle it this way.
If you’d like to set up an inherited IRA or have inherited one and need help investing, contact one of our Madison-area financial advisors today.