i-orp where to put inherited IRA $ (no penalty for "early" withdrawal)?

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Topic Author
mtwhmemn
Posts: 321
Joined: Tue Jul 03, 2018 12:07 pm

i-orp where to put inherited IRA $ (no penalty for "early" withdrawal)?

Post by mtwhmemn »

Is there somewhere in extended i-orp that you specifically can put inherited IRA holding that have no penalty for withdrawal before 59.5 years old?

We are both ~58 & will be using my wife's inherited IRA to cover living expenses in excess of what she brings home from her job that she plans to quit at ~60. (I am self employed & not working much anymore - just considering my income as "0" for planning purposes.)

We don't have much in taxable and will use what we have there to pay taxes on ROTH conversions up to 12% bracket until taxable cash is depleted.

When I put our TIRA numbers & ROTH numbers in i-orp there is a penalty for early withdrawals that will not apply to the inherited IRA money we'll tap before drawing funds for TIRA.

Make sense?
orklc
Posts: 49
Joined: Sun Mar 24, 2013 10:35 am

Re: i-orp where to put inherited IRA $ (no penalty for "early" withdrawal)?

Post by orklc »

Can you treat the planned withdrawals for the two years as additional wage income? Then list the rest of the inherited IRA as a regular IRA?
Topic Author
mtwhmemn
Posts: 321
Joined: Tue Jul 03, 2018 12:07 pm

Re: i-orp where to put inherited IRA $ (no penalty for "early" withdrawal)?

Post by mtwhmemn »

orklc wrote: Mon Jun 07, 2021 4:36 am Can you treat the planned withdrawals for the two years as additional wage income? Then list the rest of the inherited IRA as a regular IRA?
I never thought about that and plugged in some numbers to "One Time Income" but it still puts in a penalty - I guess the penalty isn't a big number in the big picture so no big deal...tnx
Exchme
Posts: 450
Joined: Sun Sep 06, 2020 3:00 pm

Re: i-orp where to put inherited IRA $ (no penalty for "early" withdrawal)?

Post by Exchme »

If you are willing to use more complex tools, the Retiree Portfolio Model (spreadsheet free at this site) or Pralana Gold ($99, requires Excel) would handle this and other tax issues better. I did struggle to get RPM to understand that I already have the inherited IRA so needed to take an RMD this year, but at least it knew what one was and wouldn't put in a penalty for using it. Both programs can tell the difference between a stretch inherited IRA (2019 and earlier) and the new 10 year variety.
Topic Author
mtwhmemn
Posts: 321
Joined: Tue Jul 03, 2018 12:07 pm

Re: i-orp where to put inherited IRA $ (no penalty for "early" withdrawal)?

Post by mtwhmemn »

Exchme wrote: Mon Jun 07, 2021 9:53 am If you are willing to use more complex tools, the Retiree Portfolio Model (spreadsheet free at this site) or Pralana Gold ($99, requires Excel) would handle this and other tax issues better. I did struggle to get RPM to understand that I already have the inherited IRA so needed to take an RMD this year, but at least it knew what one was and wouldn't put in a penalty for using it. Both programs can tell the difference between a stretch inherited IRA (2019 and earlier) and the new 10 year variety.
Thanks!
Oregon Beancounter
Posts: 19
Joined: Wed May 16, 2018 5:35 pm

Re: i-orp where to put inherited IRA $ (no penalty for "early" withdrawal)?

Post by Oregon Beancounter »

Income from an IRA cannot be treated as wage income (earned income). It is ordinary income
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