Assistance with inheritance of a 403b

[ProfessorDeb]

Maryland.
Hello, I am 60 years old, still working full time. My spouse died suddenly in 2019. I just discovered a 403b from another company which I will inherit.
My question is: Given my age and state, what will the tax burden be if I take a cash lump sum, instead of rolling it over?
I am still paying off debts due to the sudden nature of the death.
thanks in advance.

 

[LdiJ]

Maryland.
Hello, I am 60 years old, still working full time. My spouse died suddenly in 2019. I just discovered a 403b from another company which I will inherit.
My question is: Given my age and state, what will the tax burden be if I take a cash lump sum, instead of rolling it over?
I am still paying off debts due to the sudden nature of the death.
thanks in advance.

No one can answer that question without being familiar with your overall tax situation and how much money is in the 403b. It is not your age that determines the amount of tax you will have to pay, it is your overall income.

 

[adjusterjack]

what will the tax burden be if I take a cash lump sum, instead of rolling it over?

Study the resources in the following search results. Start with the IRS link then proceed with the others.

There may be enough information there to guide you to a decision.

inherited 403b rules at DuckDuckGo

 

[ProfessorDeb]

No one can answer that question without being familiar with your overall tax situation and how much money is in the 403b. It is not your age that determines the amount of tax you will have to pay, it is your overall income.

Thank you so much for replying. My tax bracket is 32% in MD and the 403b has 18.4K in it. Appreciate your time.

 

[LdiJ]

Thank you so much for replying. My tax bracket is 32% in MD and the 403b has 18.4K in it. Appreciate your time.

That is really not quite enough information either, but I can at least tell you that you would be paying at least 32% in tax on any money you take out of the 403B. I am assuming that the 32% bracket is your federal bracket not your MD bracket. I don't know of any state that has brackets that high.

If you were a client of mine, I would be taking this year's tax return and adding 18,4k of inherited retirement assets to the return to determine what your potential tax bite would be. You cannot (and should not even if you could) provide enough information here for someone to be able to do that.

If you use a tax professional to do your taxes they should be able to run the numbers for you. If you do your own then you should be able to do the same. Again, any amount you take out of the fund would go on top of any income you already have in calculating your tax.

 

[ProfessorDeb]

That is really not quite enough information either, but I can at least tell you that you would be paying at least 32% in tax on any money you take out of the 403B. I am assuming that the 32% bracket is your federal bracket not your MD bracket. I don't know of any state that has brackets that high.

If you were a client of mine, I would be taking this year's tax return and adding 18,4k of inherited retirement assets to the return to determine what your potential tax bite would be. You cannot (and should not even if you could) provide enough information here for someone to be able to do that.

If you use a tax professional to do your taxes they should be able to run the numbers for you. If you do your own then you should be able to do the same. Again, any amount you take out of the fund would go on top of any income you already have in calculating your tax.

Thanks again, so much! I think a rollover is in order!!!