I imagine I'll be steered toward a "fee only" financial advisor. I also imagine those financial advisors give advice based on their opinions and there might be many on how to handle this situation. To be sure, we'll talk to someone in person, but I'd like to get a sense on what some of my better options might be.
It sounds like the IRA place has changed his account into a beneficiary account. I've done some prelim research and it sounds like there'll likely be Required Minimum Distributions based on one of the following:
- 5 year rule
- life expectancy of original owner (20~ years based on IRS chart)
- life expectancy of nonspouse beneficiary (40~ years based on IRS chart)
We are in the 25% tax bracket (roughly $90k gross annually)
So our original thought was to use this money to buy a house. My second thought was to use it as collateral to get a mortgage to buy a house and then use the distributions to pay the mortgage. So say for example we buy a $200k house (30 yr @ 4%) we're looking at payments of roughly $1k/mo. If we take annual distributions of $16k, we'll net enough to pay the monthly mortgage and hopefully the remaining balance of the IRA appreciates in value over the distribution time.
Does that sound like a reasonably good plan? Do you have suggestions to the plan? General advice other than meeting with a fee-only financial planner (which we already plan to do)?
Thanks for reading.
Submitted July 20, 2017 at 09:41AM by JCthrow http://ift.tt/2uCFVav
