Yes - But if your partner is under the RMD age and at a lower tax rate following your death, they can take distributions at any age without penalty and may want to consider getting some of the money out of the IRA before they have to take big fat RMDs and get thrown into a higher tax bracket. Why pay the IRS money they could use sooner or save for heirs in a less onerous tax structure than a traditional IRA! They can always roll the BDA IRA into their own IRA down the road.
I am more than a little surprised by how many believe punting this to an estate attorney will provide your heirs with the advice they need to make the best financial decisions with inherited IRAs? Unfortunately, I have now gone through this scenario from several very unimaginable angles and I can tell you that I have yet to talk to an estate attorney (of which I have talked to four) who can provide any form of good IRA advice. That is not what they do! They provide a legal structure and the hopefully the enforcement of that structure for your assets. Not tax and or investment advice. Frankly, they could care less about the assets, except that they can get paid. CPA's have more experience but here again I have experienced a very wide range of knowledge and received some very poor advice more than once. Fortunately, I did not accept their answers and kept asking questions, doing more research, and found a very good CPA, eventually. Talk to your CPAs now and run through scenarios that pertain to you and determine if they can respond? Hopefully, you have a partner who WILL NOT accept the easy answer - especially if they are on the young side (< 67) or on the old side (>80) with heirs that may be involved in some of the decisions and who will eventually inherit the IRA. Can your CPA answer: What is a BDA IRA? What is a good example of when a spouse should do a BDA IRA? When might it be an advantage for heirs? If they don't know what a BDA IRA is or can't answer quickly the advantages of a BDA IRA, run! If they immediately say, "You should never do that, your partner should roll it into their IRA," without at least preferencing your and your partner's ages and/or asking you more questions about your partner's tax rate after your death and your heirs potential needs, Run! Please consider thinking of this seriously before your death so that your partner and heirs aren't at the mercy of attorneys and CPAs who do not have sufficient IRA tax and financial planning experience.
No, estate attorneys are the worst! Especially, with IRAs and how they will apply to the unique financial situations that your heirs’ inherit when you pass. Even finding a CPA with on point knowledge is very difficult. Do not leave this to a novice spouse and whoever drafted your estate docs. Please!!!!!
I just finished the Psychology of Money. One of Housel's points is do we know who we are playing with? If we are long-term investors playing with short-term investors we will eventually feel a burn. This is why so many (thank you Adam) are talking about diversification right at this moment. If you are well diversified and have excellent cash flow or cash buckets you wont suffer a third degree burn - hopefully. Today I read a Morningstar article about the significant increased capital expense rate at the big tech AI aggregators who also happen to be Microsoft, Google, Meta, Amazon. Several of these companies are well below Morningstar's "fair value" even though capital expenses are now over 30% to sales for a couple of the companies and into the high teens and climbing at all. The end of the article did warn that all of these companies will eventually have to demonstrate a return on this investment to justify their high PE ratios. How can you say that they are discounted to fair value and then report on a potential material unknown delink between expenses and sales? What % of the S&P do these companies represent?
Thank You!! More articles like this please! I have/had 4 sets of patents. Based on where all 4 couples have ended up, well into their 80s they could have retired sooner or could have/could spend more. I know this is because of the fantastic economy we have lived in over the last 40ish years of their lives. That may be vastly different the next 40. But if it is bad we will all be financially hurt in ways we can’t predict today. What is the value of living an independent life as soon as you can? Or giving when alive instead of living in fear of running out of money? I don’t know the answer but I’m very interested in more stories on early retirement or giving!
I still believe in Churchill, “You can always count on Americans to do the right thing - after they’ve tried everything else.” We are just in an "everything else" phase ... I hope!
But wont it be very high in within 10? In 10 years I believe we will see a significant increase in contract jobs. Basically everyone will be some form of an Uber driver - - i.e. we will all be for temporary hire. It has already been on the rise for a few decades in many industries and with AI some employers are already experimenting with "project job pools." It wont be long before they will ask you to be part of the "project pool" as a contract worker not an employee. This will eliminate the need for medical coverage and other benefits as well as reduce office related expenses.
Please add that spouses who inherit IRAs from their spouse before RMD are required can take distributions before age 59 1/2 without penalty. You do still have to pay ordinary income taxes on any distributions.
But how is your cash invested? If you are over 55 and building a 3-5 year cash run-way - - even if you are in CDs and/or Treasuries if they are > 1 year, you are technically in bonds. Just look at your brokerage firm pie chart for your account. This wasn't a bad ladder strategy to build over the past two years, with very safe rates > 4%. Again, I'm talking about folks > 55. I wouldn't necessarily do it now, if I was < 55 (rates are declining and are < 4%). But you know when you're > 55 it isn't just about a market correction anymore!!!!! I started creating a "cash/bond bucket" at 52 because frankly safe rates hadn't been that high in a very long time or very often in my life. My husband's employment was very sensitive to technology changes and showing the stress. So hmmm, "Why not build in some extra safety at solid rates?" My husband unexpectedly passed away from complications of cancer, in a month, in 2024 (something unthinkable and devastating). This financial choice has already bought me considerable time and flexibility. Do I think about my total long-term rate of return? Absolutely! But I'm absolutely blessed to be able to think about it!
Comments
Yes - But if your partner is under the RMD age and at a lower tax rate following your death, they can take distributions at any age without penalty and may want to consider getting some of the money out of the IRA before they have to take big fat RMDs and get thrown into a higher tax bracket. Why pay the IRS money they could use sooner or save for heirs in a less onerous tax structure than a traditional IRA! They can always roll the BDA IRA into their own IRA down the road.
Post: The IRA Decision That Affects Your Kids
Link to comment from April 21, 2026
I am more than a little surprised by how many believe punting this to an estate attorney will provide your heirs with the advice they need to make the best financial decisions with inherited IRAs? Unfortunately, I have now gone through this scenario from several very unimaginable angles and I can tell you that I have yet to talk to an estate attorney (of which I have talked to four) who can provide any form of good IRA advice. That is not what they do! They provide a legal structure and the hopefully the enforcement of that structure for your assets. Not tax and or investment advice. Frankly, they could care less about the assets, except that they can get paid. CPA's have more experience but here again I have experienced a very wide range of knowledge and received some very poor advice more than once. Fortunately, I did not accept their answers and kept asking questions, doing more research, and found a very good CPA, eventually. Talk to your CPAs now and run through scenarios that pertain to you and determine if they can respond? Hopefully, you have a partner who WILL NOT accept the easy answer - especially if they are on the young side (< 67) or on the old side (>80) with heirs that may be involved in some of the decisions and who will eventually inherit the IRA. Can your CPA answer: What is a BDA IRA? What is a good example of when a spouse should do a BDA IRA? When might it be an advantage for heirs? If they don't know what a BDA IRA is or can't answer quickly the advantages of a BDA IRA, run! If they immediately say, "You should never do that, your partner should roll it into their IRA," without at least preferencing your and your partner's ages and/or asking you more questions about your partner's tax rate after your death and your heirs potential needs, Run! Please consider thinking of this seriously before your death so that your partner and heirs aren't at the mercy of attorneys and CPAs who do not have sufficient IRA tax and financial planning experience.
Post: The IRA Decision That Affects Your Kids
Link to comment from April 21, 2026
No, estate attorneys are the worst! Especially, with IRAs and how they will apply to the unique financial situations that your heirs’ inherit when you pass. Even finding a CPA with on point knowledge is very difficult. Do not leave this to a novice spouse and whoever drafted your estate docs. Please!!!!!
Post: The IRA Decision That Affects Your Kids
Link to comment from April 21, 2026
Yes!
Post: A Very Sensible Conclusion
Link to comment from February 21, 2026
I just finished the Psychology of Money. One of Housel's points is do we know who we are playing with? If we are long-term investors playing with short-term investors we will eventually feel a burn. This is why so many (thank you Adam) are talking about diversification right at this moment. If you are well diversified and have excellent cash flow or cash buckets you wont suffer a third degree burn - hopefully. Today I read a Morningstar article about the significant increased capital expense rate at the big tech AI aggregators who also happen to be Microsoft, Google, Meta, Amazon. Several of these companies are well below Morningstar's "fair value" even though capital expenses are now over 30% to sales for a couple of the companies and into the high teens and climbing at all. The end of the article did warn that all of these companies will eventually have to demonstrate a return on this investment to justify their high PE ratios. How can you say that they are discounted to fair value and then report on a potential material unknown delink between expenses and sales? What % of the S&P do these companies represent?
Post: Index Fund Bubble
Link to comment from January 28, 2026
Thank You!! More articles like this please! I have/had 4 sets of patents. Based on where all 4 couples have ended up, well into their 80s they could have retired sooner or could have/could spend more. I know this is because of the fantastic economy we have lived in over the last 40ish years of their lives. That may be vastly different the next 40. But if it is bad we will all be financially hurt in ways we can’t predict today. What is the value of living an independent life as soon as you can? Or giving when alive instead of living in fear of running out of money? I don’t know the answer but I’m very interested in more stories on early retirement or giving!
Post: Early Retirement
Link to comment from January 17, 2026
I still believe in Churchill, “You can always count on Americans to do the right thing - after they’ve tried everything else.” We are just in an "everything else" phase ... I hope!
Post: Plan for a Pay Cut
Link to comment from December 29, 2025
But wont it be very high in within 10? In 10 years I believe we will see a significant increase in contract jobs. Basically everyone will be some form of an Uber driver - - i.e. we will all be for temporary hire. It has already been on the rise for a few decades in many industries and with AI some employers are already experimenting with "project job pools." It wont be long before they will ask you to be part of the "project pool" as a contract worker not an employee. This will eliminate the need for medical coverage and other benefits as well as reduce office related expenses.
Post: About those US medical costs….
Link to comment from November 11, 2025
Please add that spouses who inherit IRAs from their spouse before RMD are required can take distributions before age 59 1/2 without penalty. You do still have to pay ordinary income taxes on any distributions.
Post: Rule of 55: Early Retirement
Link to comment from November 11, 2025
But how is your cash invested? If you are over 55 and building a 3-5 year cash run-way - - even if you are in CDs and/or Treasuries if they are > 1 year, you are technically in bonds. Just look at your brokerage firm pie chart for your account. This wasn't a bad ladder strategy to build over the past two years, with very safe rates > 4%. Again, I'm talking about folks > 55. I wouldn't necessarily do it now, if I was < 55 (rates are declining and are < 4%). But you know when you're > 55 it isn't just about a market correction anymore!!!!! I started creating a "cash/bond bucket" at 52 because frankly safe rates hadn't been that high in a very long time or very often in my life. My husband's employment was very sensitive to technology changes and showing the stress. So hmmm, "Why not build in some extra safety at solid rates?" My husband unexpectedly passed away from complications of cancer, in a month, in 2024 (something unthinkable and devastating). This financial choice has already bought me considerable time and flexibility. Do I think about my total long-term rate of return? Absolutely! But I'm absolutely blessed to be able to think about it!
Post: AI Rally Market Risks
Link to comment from November 11, 2025