Suze Orman's Women & Money (And Everyone Smart Enough To Listen) How Not To Pay Taxes On An Inherited Retirement Account
Dec 11, 2025
Suze tackles borrowing against insurance policies, emphasizing the risks involved. She clarifies that inherited retirement accounts incur taxes, urging attention to withdrawal timing. The discussion shifts to the complexities of choosing beneficiaries and the importance of understanding Medicare enrollment while still employed. Suze debates the true costs of purchasing an expensive car in retirement and advises against withdrawing from a 401(k) for housing debts. Plus, she encourages open conversations to address family money conflicts.
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The Red Flag In 'Borrow Against' Pitches
- The word 'borrow' should trigger scrutiny; borrowing against your assets often means unnecessary cost.
- Social media financial pitches can be misleading and prey on those who don't verify advice.
Don't Borrow Against Your Own Assets
- Avoid borrowing against life insurance or using margin to borrow against stocks unless you understand the costs and risks.
- Borrowing triggers interest payments and margin calls that can wipe out investments if prices fall.
Inherited Pre-Tax Accounts Trigger Taxes
- You cannot avoid ordinary income tax on inherited pre-tax retirement accounts; treat the inherited account as taxable when distributions are taken.
- Focus on how much is in the account and the withdrawal timeline rather than trying to skirt taxes.