The Declining Appeal of Inherited Retirement Accounts

20 Pages Posted: 12 Jan 2023 Last revised: 2 Feb 2023

See all articles by Richard L. Kaplan

Richard L. Kaplan

University of Illinois College of Law

Date Written: January 12, 2023

Abstract

As retirement accounts proliferate and grow in value, American retirees are increasingly leaving substantial balances in these accounts to their adult children, siblings, and other relatives. Until recently, these new owners were able to withdraw funds from these tax-favored accounts over their lifetimes as their personal circumstances dictated. But legislation enacted in late 2019 and regulations issued in February 2022 have sharply limited the flexibility that non-spousal beneficiaries now have regarding these assets. This article examines those changes, analyzes their impact on the new owners of inherited retirement accounts, and considers what planning strategies are now appropriate.

Suggested Citation

Kaplan, Richard L., The Declining Appeal of Inherited Retirement Accounts (January 12, 2023). Virginia Tax Review, Vol. 42, No. 2, 2023, University of Illinois College of Law Legal Studies Research Paper No. 23-01, Available at SSRN: https://ssrn.com/abstract=4323136

Richard L. Kaplan (Contact Author)

University of Illinois College of Law ( email )

504 E. Pennsylvania Avenue
Champaign, IL 61820
United States
(217) 333-2499 (Phone)
(217) 244-1478 (Fax)

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