IRA Minimum Distribution for recently Opened Account

[bonniesue]

I received a $120,000 cash settlement /payout from my deceased husband's employee retirement on Nov 15, 2019. I placed this money into a Capital one 360 retirement account. What is the amount of distribution must I take in 2019 to avoid a penalty. I am 79 years old.

 

[Spock]

The 2019 RMDs are calculated based on the value of the account on 12/31/2018.
There are variables based on was your husband already taking RMDs or not? etc.
This table should get you there quick
or have Capital One figure the amount for you.
https://www.irs.gov/retirement-plans/required-minimum-distributions-for-ira-beneficiaries

 

[HI Bill]

Welcome! If this was a transfer from a qualified account (401(k)) or similar, and it's considered an "Inherited IRA" (in your name with your husband listed as the former owner), then "Generally, you must begin taking RMDs for Inherited IRA assets by December 31 of the year after the year of the original owner's death." If it's not an IRA (let's say, just a cash payout from the company's insurance), then it's likely all taxable as income. You may want to consult a tax advisor, as I'm not one.

The account you've placed the money in appears to have an APR of 0.80%. I'd suggest moving it to Vanguard, as their money market fund is paying around 2%.

 

[pjm-7]

You should also have received a statement that will designate how much of the proceeds are pre-tax and what if any is after-tax. Any after-tax funds should not be placed into a retirement account because you would pay tax again when you draw the money out.

Please consult a tax advisor with all of the statements that you received.

 

[target2019]

I received a $120,000 cash settlement /payout from my deceased husband's employee retirement on Nov 15, 2019. I placed this money into a Capital one 360 retirement account. What is the amount of distribution must I take in 2019 to avoid a penalty. I am 79 years old.

Interesting first post, bonniesue. I think capital one and/or tax advisor should also be consulted.