I Inherited an IRA in San Francisco — What Should I Do?

I Inherited an IRA in San Francisco — What Should I Do?

Inheriting money is rarely just about money.

Most of the time it happens during a moment when you’re already dealing with the loss of someone important. Then suddenly you’re handed paperwork, tax questions, and decisions about an account that might represent decades of someone’s work.

If you’ve inherited an IRA and live in San Francisco, you’re not alone in feeling unsure about what comes next.

The good news is that the rules are manageable once you understand a few key things.

First — Take a Breath and Don’t Rush

One of the most common mistakes people make is moving too quickly.

People feel pressure to:

• Cash it out
• Move it somewhere else
• Invest it immediately
• Or split it among family members.

In most cases, you actually have time to think through the best decision.

An inherited IRA can often remain invested for years depending on your situation.

Step One: Find Out What Type of IRA It Is

This matters more than anything else.

Traditional IRA

Withdrawals are usually taxable income.

Roth IRA

Withdrawals are often tax-free.

That single difference can affect thousands — sometimes hundreds of thousands — of dollars over time.

The Rule Most People Don’t Know About

Many heirs are surprised to learn about the 10-year rule.

For most non-spouse beneficiaries:

• The account must be emptied within 10 years
• You can usually choose when to withdraw during that period
• Taxes depend on the type of IRA.

That flexibility can actually create planning opportunities.

A Quick Example

Imagine someone in San Francisco inherits a $600,000 traditional IRA.

Taking the entire amount at once could push them into a much higher tax bracket.

Spreading withdrawals over several years may significantly reduce taxes.

This is why planning matters.

California Taxes Matter Too

Because you live in California, withdrawals from a traditional inherited IRA are typically taxable at both the federal and state level.

That doesn’t mean the inheritance is a problem — it just means strategy can make a big difference.

Many people benefit from coordinating withdrawals with:

• lower-income years
• retirement timing
• other financial events.

Another Mistake People Make

Many inherited IRAs stay invested exactly the way the original owner left them.

Sometimes that makes sense.

Sometimes it doesn’t.

Their investments were designed for their life, not necessarily yours.

Reviewing the portfolio can help align it with your goals.

The Bigger Question to Ask

When someone leaves you an account like this, it’s worth asking:

What would they have hoped this money would do for you?

For some families it means financial security.

For others it means opportunity — a home, education, retirement freedom.

That perspective usually leads to better decisions than reacting quickly.

You Don’t Need to Live Near Your Advisor

One thing many people don’t realize today is that financial planning doesn’t have to happen in the same city.

Our firm works with clients virtually across the United States, including many in California.

Video meetings, secure document sharing, and simple scheduling make the process straightforward no matter where you live.

A Simple Conversation Can Help

If you’re navigating an inherited IRA and just want to talk through the options, that’s exactly the kind of situation we help with.

Final Thought

An inherited IRA can feel complicated at first, but it’s really just about making thoughtful decisions over time.

You don’t have to figure it out all at once.

A little guidance early can make a big difference later.