I Received a Huge Check and I’m Mad About It

[@metorphoric]

This is totally in him. The estate should have taken care of this and he should have rolled it over prior. He was lazy and didn’t want to deal with it .

[@qdllc]

Yeah. I agree. Companies avoid liability, so I suppose rather than have it rolled over shortly after the death of the account holder, he kept it going, and after a while, they MUST disburse funds according to estate law.

[@johnslick8940]

somebody is jealous hahahaha

[@roddiesimmons8773]

I would not be surprised if they DID notify him and like everything else, he was ignoring it.

[@Hippo_27]

I mean, leaving a 401k alone requires laziness if you think about it.

[@lkj0822g]

Technically, if the account has a named beneficiary, then it is outside the purview of the estate and probate process. Same thing with the proceeds of an insurance policy. Now, if the account names the beneficiary as "The Estate of xxxxx" or if there is no named beneficiary, then the proceeds would be rolled into the estate probate process.

[@danielhurst8863]

He inherited a 401K plan where the Five year rule applies. All inherited 401K have rules. If you are a spouse, close in age, you can treat the 401K as your 401K, but since the 2019 Secure Act, most others have to act under the Five Year or Ten Year rule, which means all the funds must be removed from the 401K at the end of that period. If the deceased had started taking Required Minimum Distributions, other rules apply as well. There is nothing that can be done in this case, because the 401K administrator is following the law.

[@aj4856]

SECURE Act was passed in 2019, but took effect on Jan 1, 2020. The check was mailed in 2024, and was 5 years after his father's death, which means that his father died in 2019 and was subject to the previous rules for inherited retirement accounts. That means he should have been taking RMDs since 2020. Even before the SECURE Act became law, many retirement plans had 5 year limits on fully disbursing inherited accounts. I inherited my father's 401(k) in 2005, and had only 5 years to fully disburse it, either by rolling it over into an inherited IRA or cashing it out.

[@billyrayband]

this was his fault. He is an idiot. He had 5 years to do something and did nothing. He got notifications...

[@Enginshim]

It must be nice to have 300k waiting for you and say “nah I’ll wait”

[@jarrettpierce5626]

Yeah he’s acting like he didn’t sit on it for 5 years lol

[@dnah02]

He slept and got punished for not keeping his head in the game.

[@cutehumor]

@@billyrayband I agree. He got owned

[@derekd1510]

He doesn't understand the tax implications either. He needs a financial adviser. Finances are not his forte

[@BaconMountainMan]

This is 100% on him.

[@Indianawhiskeyandbourbon]

Exactly, he waited 5 years...... what the hell did he expect

[@natik-f8x]

The efficiency of Cynext solution is next level.

[@Chele-nm4qx]

Why didn't he roll it over before now? That's on him 100%. He had 5 years to do something with this & he didn't!

[@Santaheckler]

They didn’t notify him of what exactly? He knew he inherited the 401k and it seems obvious that he’d need to roll it over into his own account, not keep it in his deceased father’s account for 5 years…am I missing something? 🤷‍♂️

[@1999VR4]

Yeah you are.. imagine you didn’t know about this rollover rule and no one ever told you. How would you know it has to be withdrawn if no one ever told you, it has to be withdrawn.

[@1999VR4]

@@Santaheckler I made a mistake because I wasn’t given the opportunity to learn that knowledge until it was too late. I learned a life lesson but in reality wasn’t to big of a deal I reallocated the money and I gained knowledge . Overall it was dealt with. That’s the point of people calling his show. They come to him for advice and that’s exactly what he did . It was mission successful

[@Santaheckler]

@@1999VR4 dude I’m not trying to dig on you but it seemed like Dave was blaming the company holding the 401k…so it made me wonder what I was missing. Seems like an estate lawyer would have guided you if you had one?

[@1999VR4]

@ so here’s the thing I definitely did not have an estate lawyer unfortunately my father did not leave me or my brother with much other than this. We did the best we could at the time as I’m sure you could understand if you’ve ever lost someone close and had to deal with the estate of someone there’s a lot to deal with at the time and I’m sure Fidelity may have mentioned when I got the inherited 401(k) that it had to be withdrawn, but it must’ve went over my head. I do remember them specifically asking me if they would like to manage the account for me and I said I would handle everything myself I think at that point Fidelity didn’t give me any sort of warning that it had to be withdrawn and five years later here we are luckily I was able to roll it over into a 60 day inherited IRA where I will have to withdraw that amount within the next five years As far as the 55 that was automatically withheld at the time, I didn’t quite understand how it all went down, but it does make sense. Fidelity is required to withhold 20% and I’m just going to be taking that 55,000 that was sent as a withdrawal so I will only be taxed on the 55,000 as income and the other amount will be rolled over so all in all it’s really not that big of a deal at the end of the day and I’m smarter for it knowing this weird rule But I am still steadfast at Fidelity did not notify me or warn me before they cut me a check not a phone call not an email. I’m sure they might’ve sent me something by snail mail, but I already have my workplace 401(k), my personal investment accounts with them so I get plenty of paper statements about all of that, including shareholder meetings for my stocks so needless to say a needle in a haystack. A phone call from them would’ve been very nice but then again they manage well over 1 million accounts so it is what it is.

[@1999VR4]

@ at the end of the day, the responsibility still falls on me, but I will say I wish I had the knowledge I have now a month ago I would’ve made different choices. The general consensus of everybody in the comments was I should’ve known better, but this is knowledge that you guys already had before the general public would not really know about this weird rule But the IRS always gets their chunk and I should’ve known better that nothing in this world comes free lol

[@chrisinolympiawa9295]

He ignored a bunch of letters telling him this was going to happen and he needed to take action.

[@Hoggdoc1946]

You have proof to back up your statement I doubt it.

[@royhoco5748]

this is one reason why I have a financial adviser, he knows a lot more than I do about finances

[@joshuamartinez7113]

This is known as a forceout process in 401k administration. The plan sponsor likely tried to contact multiple family members to take the assets out of the plan. After several attempts they will liquidate the account for you and issue you a check to the respective recipient but this triggers a taxable event since no asked for a direct rollover.

[@lauren_texas]

There is NOT a work around. I used to help manage retirement accounts. As a death beneficiary, you only have so much time to get the funds in an account that’s solely in your name. It can’t just be kept in the decedents name or an estate account after a certain period of time. Now if the account was already in his name, depending on when it was set up you either have 10 or 5 years to withdraw the money completely. If they issued him a check that he didn’t ask for, his time on the account must have ran out.

[@AnAZPatriot]

I just retired early at 51. The first thing I did was call the 401k company that handles my work accounts and made sure that the rules of the program allowed for me to keep it in there and just let it ride. Always find out what the employer plan rules are when inheriting or leaving a 401k in place.

[@letsgobrandon6281]

Nobody better ever send me 250,000. Id be pissed. Lol

[@Robert-cu9bm]

If someone took 50k from you'd be pissed.

[@feliciavale4279]

​@@Robert-cu9bmWell yeah this is the main issue. He essentially lost 55k.

[@ianjohannes6284]

Since this call was in 2024 we can assume he inherited the funds prior to the secure act which took effect in 2020. Under the old rules he had the option to start stretch RMDs right away OR deplete the account within 5 years. Since he has never taken a distribution, they sent him the lump sum at the end of the 5 year period, with the mandatory 20% tax w/h. The stretch RMD option could have been better for him but unless he has a Time Machine his only option is deposit the check and pay the taxes. Also, he is probably going to owe more taxes since his taxable income will put him in a bracket higher than the 20% they withheld.

[@brentgindelberger8851]

Yes, mentioned he had a $100K job and a side business that made just as much.

[@DavidDouglasZach]

You are correct, Ian.

[@lkj0822g]

Yep. This is 100% on the caller and shame on Dave for trying to make out like the account administrator is somehow at fault.

[@azgunner]

Dave called a truck driver “honey” 😂

[@reneb6702]

He always does...weird but that's him. Lol

[@joepfeiler5911]

My Mom had trouble with a mistake with my Dads account. The agent filled the paperwork out wrong. With the help of an outside party and the agent owning up to his mistake, the company did take back the check and redo it in the way that was most beneficial to her.

[@Jev9240]

Im sure they attempted to contact him before they issued that check.

[@davidturk6170]

6:52 - what Dave is missing is that because the 401k balance was not rolled over directly to another entity (a check was cut), the whole $300,000 is considered a taxable distribution. Check with a tax professional, but I’m pretty sure that’s the case. It happened to me (I did get it corrected since it was their fault).

[@nathanaelcambridge6059]

Dave is not an investment advisor why people don’t understand that I don’t know. He knows how to get people out of debt. You cannot do a 60 day rollover on inherited money. It should’ve went to it into an inherited IRA but if he codes this as a rollover and tries to put this into a retirement account in his name own he’s gonna have problems.

[@Fishouta]

Thank you! That is what I thought!

[@michael589m]

jade is an expert. She has music degree.

[@Tehui1974]

@@michael589m You're the real expert. You post on KZbin videos.

[@grega2362]

It is a rollover. You roll it to an inherited IRA. If you do anything other than roll it to and inherited IRA, then you will be taxed. Dave is correct.

[@nathanaelcambridge6059]

@@grega2362 you also don't know what your talking about. A direct rollover could have been done while an indirect rollover when it comes to inherited retirement money can’t be done but I bet you don’t even know what that means, nor do you know the rules are different for spouse vs non-spouse.

[@Jim_Curtis]

This guy has only himself to blame for waiting too long to roll over the 401k. All he can do is deposit the check into an IRA within 60 days. He's stuck with the amount withheld and paid to the IRS because they are not giving the money back.

[@tjls123]

Seems like you're the only logical person in this comment thread!

[@cuivre2004]

@@tjls123 Dave was saying that the IRS will send him a portion of that back, after his taxes are filed, as long as he puts the amount he did receive into an IRA quickly.

[@FSUSeaPA]

He has more issues than that. Based on the timing (5 years) his dad died under the OLD rules for inherited retirement accounts; under those, his likely best option was to role it to an "inherited IRA" account, then taken RMDs over his life expectancy. He's missed four years of those and is possibly on the hook for penalties on that. That's a separate problem from the check that he got with the $55k tax withheld.

[@Enginshim]

Dude could have cashed a check for 300k 5 years ago and paid off his house and put money into his own 401k. What a herb.

[@PhilSallaway]

@@FSUSeaPA due to the incompetence IRS rules over when the $ has to be taken out over 10 yrs or at the end of 10 yrs he may get a few yrs of get out of jail free. Also he can apply for a waiver… for not making the RMDs on an inherited 401k. But he has to take all of the ones he missed ASAP

[@willmichael4033]

This guy is going to pay stupid tax in the form of regular taxes!

[@1999VR4]

Actually getting. Most of the 55 grand back during tax season. I’m only getting taxed on the 55 grand as income the other part is being rolled over into an Ira that I got to take the money out over the next 4-5 years

[@BrianW211]

Dave isn't telling the guy that even if he takes the check and uses to fund an inherited IRA, he actually inherited it in 2018 and he only has 3 to 4 more years to withdraw it all.

[@1999VR4]

Pretty much yes

[@lkj0822g]

Actually..... There is no need to create an Inherited IRA at this point. The funds have been disbursed and taxes withheld. When he does his taxes for 2024, there will be a reconciliation and depending on his situation, he will either owe additional taxes or get a refund.

[@BrianW211]

@@lkj0822g The "need" is to reduce taxes. Spreading it out over the remaining 4 tax years will lower the taxes burden because it will put all of the taxable income into the 24% tax bracket instead of some of it being in the 32% and 35% bracket. The tax saving on that $300K over 4 years vs $300K in 1 year (plus the callers regular income), would be in the $10K to $20K range.

[@1999VR4]

@@lkj0822g​​⁠wrong. I am the caller in this video and the actual facts is you have 60 days to roll over into a Ira where i am given an additional 5 years to withdraw the remaining balance to keep my tax liability down. I only owe taxes on the 55 grand

[@michoacan55]

​@@1999VR4your own fault for waiting 5 years to deal with it. Take responsibility for your actions You got lazy and here are the consequences of your laziness

[@jimmymcgill6778]

He's mad about it? This all his fault. He left it in there after he knew about it. They did nothing illegal or unethical. They have lawyers and tax people. They know what they are doing. Wasn't it 5 years before the secure act took effect? So if he passed away before then, he have only 5 years.

[@July.4.1776]

The caller is to blame he knew it was sitting around it’s on him.

[@Tehui1974]

He seems like a good kid. This was a life lesson for him.

[@rational9229]

The caller needs to shut up and listen.

[@ameliagfawkes512]

No-one's allowed to be upset anymore ...?

[@ThePolypam]

​@@ameliagfawkes512If you're calling for advice, how can you be receptive to it when you won't start yapping?

[@Cyberspine]

​@@ameliagfawkes512 What's the point of calling the show if you are going to just be upset and not listen?

[@SergeyProdanov]

Your work shows the kind of person you are-efficient, organized, and result-oriented. Well done, Cynext solution. You are great at what you do. I appreciate your efforts and dedication. May you continue to show your worth and skills like this in the future.

[@JoJo-gr3pr]

So he had 5 years to do something about this but waited until now and now he's upset?

[@ThePolypam]

So upset he won't stop to listen.

[@Jaden-m2k]

2 Replies

[@erikcampen8276]

Personal opinion? I think he should take the 55k hit for being a sniveling, annoying douchebag.

[@tonimcbride4196]

Each account has specific rules as set by the IRS and if they are not liquidated within the amount of time that is set by the plan, this is what happens. He should have at the very minimum, found out the rules at the beginning of the game.

[@djpuplex]

That smartvestor will help themselves to about $2k-$5k.

[@eeebee6166]

Like any other advisor lol

[@blashokowski8794]

@@eeebee6166except Uncle Dave doesn’t receive a commission check

[@jwonz2054]

Proof?

[@africanqueen1655]

Why not, should they work for FREE? 🧐 Do you work for FREE? 😳

[@djpuplex]

@@africanqueen1655 Most of what they provide can be learned from a Google search

[@aj4856]

The plan has every right to set a time limit for inherited accounts, and they notify the beneficiaries of that limit at the time that they inherit. That said, if it's been at least 5 years since he inherited, that would indicate that his father died in 2019, which means he's subject to the old rules for inheriting a 401(k) and should have been taking RMDs since 2020.

[@scoutwilson6762]

He says he's upset over getting a huge check in the mail. I will happily take your 550k huge check & relieve you of your pain.

[@izzyostrov2271]

I guarantee there's something missing from his story.

[@alicelaybourne1620]

I would put money on the fact that he was notified. I lost my Dad in 2014 (same rules he was under). The information was sent out promptly and routinely until the money was moved. I wouldn't assume unethical (or nearly unethical behavior) based on this guys experience. He was complacent and should have taken care of his side of the inheritance.

[@funtechu]

Yeah, he seemed to have no issue finding the check now, so you're telling me he received exactly no correspondence for the past 5 years and then suddenly found a check? Give me a break.

[@austind2115]

The company did it correctly. He had to pay the taxes and take the money within 5 years if he did not select the 10 year option. The taxes were coming out either way. He could not roll this into his name without paying the taxes.

[@davidturk6170]

3:23 - the secure act is in place, but they’ve been waiving the requirement until this year 2025.

[@funtechu]

So let's be clear, this caller is under the pre 2019 rules, not the Secure Act 10 year schedule. Prior to the Secure Act, an inherited 401k must be emptied within 5 years. This caller did not do that, and so as required by law the company issued a disbursement for the full amount at the end of 5 years.

[@skills7071]

I just went thru this. If his father died and he was the sole beneficiary then he had to close his fathers account. They would then transfer the $$ into a NEW account with his name on it or close the account and send a check. If there was a sibling, same as above but split equally. Sounds to me like he never took any action, the 5 years was up and they took the taxes and sent him a check. Womp womp...next time, be proactive buddy. You can't let it sit there. Sounds like a lot of poor estate planning

[@1999VR4]

Fidelity never told me it had to be moved out. They asked me if they wanted me to let them manage my account and I told them no. That’s how it went down. Not a big deal the rest was moved over into a IRA for the remaining few years and I’ll get most of the withholding fidelity took back during tax time

[@AuroraCardi-in9zt]

He said he kept it in there because it was doing very well in what his dad's company had it invested in. He knew what he was doing but ignored the letters sent to him! The check was mailed to him so they had the correct address and now he is mad because he doesn't like that the rules of the 401 k plan caught up with him!

[@danielhurst8863]

BTW, there is no option to inherit a 401K from your parents and use this as your retirement 401K. It can be rolled over into an inherited 401K, but those funs must be depleted within 10 years. The government wants its taxes on that money, and they won't allow the 401K to be constantly tax deferred from one generation to another. There are special rules for minor children and the disabled, but that doesn't apply in this case. Edit: Ramsay is 100% wrong on how this works. The entire amount will be taxed. This is not the same as having a 401K from one company and and rolling it over into another qualified account. All the gains in the inherited 401K are going to be taxed at ordinary income, unless part is ROTH.

[@SriSasSa2015]

Managing walkthroughs from various angles with such clarity is remarkable. Making complex topics easy to understand is really something. Awesome work

[@am_1886]

He: I didn’t know that DR: yeah I know!! 😂😂😂

[@bobdadruma]

I had a similar thing occur back in 2012. My accountant was able to fix it with no problem. I got a big tax return that year. The IRS flagged it and they contacted my accountant. He supplied the IRS with the proper forms and I never heard any more about it.

[@howlbeast]

Did you get your money / difference ?

[@1cruiselvr656]

Not the same. This guy inherited the 401k account from his father and assumed he could keep the money in that account with no time limit. He should have done his homework. Death benefits come with responsibility of knowledge about what you inherited. Totally his fault. And Dave is wrong. Too late now.

[@Liberalhunter89]

Waiting for the day to the IRS is abolished

[@strangeroamer3219]

@@Liberalhunter89 Republicans keep promising. Maybe Trump can abolish it.

[@jacobg8640]

Sounds like your accountant had you do an indirect rollover and hopefully had you use other funds on hand to cover the withholding so that portion wouldn't be seen as a distribution. Then your withholding was refunded. I don't think it works the same for inherited 401ks though.

[@HLB0007]

I think Dave is wrong… the check is technically after tax income. Can’t be considered a roll over after taxes are pulled. If it’s put back into a retirement account you run into the annual limit. Better to take the money and invest outside of a retirement vessel.

[@rebekahwilson7703]

Prime example that ignorance is not bliss.

[@peterrose5373]

He was happy until he learned...

[@Blitzzy]

ignorance was bliss 😂

[@Jaden-m2k]

3 Replies

[@commonenglishmistakes4360]

What courts allow as "proof" of notification is a disgrace. The show a copy of the letter they claim was sent with no proof of delivery whatsoever. Total con.

[@fishtail1129]

Never leave an old 401k with a previous employer, regardless if it’s inherited. The company still has some control over it and you have to potentially deal with HR to make changes. Caller should have immediately rolled it into an IRA.

[@genglandoh]

I completely agree

[@bstock]

In general I agree and for those that don't expect to make over the limit to be able to contribute to a roth IRA, yes they should do that. It gives you far better control over the retirement account. But if you're higher income, and if you have money in a traditional IRA, you can no longer do a backdoor roth IRA unless you either pay extra in taxes or roll the entire balance over (called pro-rata rule), which means you'll be taxed on all of the money as income for that year. In that case, you should roll traditional IRA money over to your new employer or leave it with the old employer. It may be more of a pain but can lead to less taxes if all done correctly.

[@PhilSallaway]

There’s one good reason it is protected by ERISA just like a pension

[@fishtail1129]

@@bstock I wasn’t talking about a Roth. Just simply do a rollover to a traditional IRA. That protects its tax status and gives you control. There’s no reason at all to roll to a new employer 401k. Why would you limit yourself to a company’s plan options when you could literally choose anything you want? Not to mention 401k’s have higher fees.

[@bstock]

@@fishtail1129 Right I understand that, but if you have funds in a traditional IRA, you cannot do a backdoor roth contribution without hitting pro-rata rules. So if you think you'll need to do backdoor roth in the future, you should leave it in a 401k (either with the old or new employer).

[@jodylarson4697]

I suspect that the company did notify him, and he decided that what they were telling him to do was optional, not required. Now it's come back to bite him and we get the "They never notified me" story.

[@nickm4662]

He probably got a letter in the mail and he missed it.

[@morrigan908]

Just to play devil's advocate, they may have had an old address. That's still his fault, of course, but a different kind of fault.

[@LauraSchendel-ko1qk]

I think that if you want to leave money for your family, it’s better to leave them life insurance. It’s non-taxable!

[@StasiaAleen]

Woh. This call taught me how little I know about finance. This is not entry level Ramsey calls. 😊😊

[@tompinkerton7101]

This is an inherited 401(k). You cannot do a 60-day rollover on inherited accounts unless you are the spouse. Unfortunately, Dave is wrong on this one.

[@ihill6533]

I am sure he has been contacted but didn’t pay attention… until there was a problem.

[@1999VR4]

Wrong. I’m very vigilant about picking up calls and reading emails from fidelity

[@HyperOrangeDragon]

The suggestion was to immediately turn around and reinvest the 250K, to avoid paying taxes on that much at least. Couldn’t you also just reinvest the 250K, and 50K of your own as well, so that on paper the entire 300k was reinvested like a roll over? Seems like that would force the IRS to give back the entire 50k in the next tax return when they see all the numbers laid out together.

[@donnabrewer4320]

The secure act started in 2020 and Ryan's Dad died in 2018 so the 10-year rule would not apply. He also had five years to roll it over into his name, and he did not do that, shame on him! I had the same situation when my husband died and his 401k administration company also told me I had 5 years to roll it into my name or they were going to send me a check.

[@t206kid]

Don't blame the company. Even if you just leave a job most jobs give you a year or two to take out the money. No sympathy for the caller and I'm surprised Dave isn't on the caller in terms of being responsible and on top of things.

[@AT-hs9nf]

The guy is at fault for not looking into it thoroughly. Period. Stop blaming the company.

[@angryox3102]

Probably didn’t check his mail either.

[@AT-hs9nf]

@angryox3102 100% and as always Dave jumped on them being so unprofessional and other bs. The caller thinks he is all that when he mentioned 401k plan had better options. Just shows how much he really knows abt any of this. I say this call was total bs. Pay the taxes (with withheld money), invest the check and move on.

[@alicelaybourne1620]

@@AT-hs9nf Yeah, the taxes are paid, and he has the cash he didn't "earn" on hand. I am sorry for his loss, but he knew it was growing well, so he should have been informed of the rules governing the account in 2019

[@ameliagfawkes512]

People call in looking for advice. They don't need you weighing in with your victim-shaming mentality. The Ramsay videos I enjoy are the ones where people hang up better off, with their dignity intact. It's happening less and less because of all the condemnation going on both on-screen and in the comments.

[@AT-hs9nf]

@@ameliagfawkes512 And we don't need you to be sensitive to facts. So move on 😉.

[@grega2362]

This is on the executor. There is a reason executors get paid, because it is work. It sounds like he was the executor. He left it sit, and he got slapped.The Secure act has nothing to do with this. The company doesnt have to pay to maintain the 401K for a dead former employee. His only chance is because his parent died before the Secure act was around, so he may be able to work something with that, however, since he didnt take RMD's like you get from a pre Secure Act inherited IRA, he would still have IRS problems.

[@sconnell1791]

Retirement accounts don't go to probate unless the participant fails to designate a beneficiary and there isn't another beneficiary chosen by the plan administrator. The executor has nothing to do with it.

[@grega2362]

@@sconnell1791 No acct is acted upon until the executor presents the death cert, the short cert and tax ID, and that includes retirement accts. In this case the guy knew about the acct but did nothing with it. If there are no beneficiaries then the executor is to follow the will and unless the acct is massive, it still wont go to probate court, but it will cost the estate more and make the executors life harder. Ask me how I know. If there are, then it is a passive duty as the financial company will distribute and the executors duty to notify the recipients. It wont go to probate court just because there isnt a beneficiary. No beneficiary, no will, no executor, then it goes to probate court.

[@skd7028]

Not necessarily. If the son was designated the beneficiary it would be outside probate.

[@charlesmoore8166]

I don't think this is a big deal. He should have taken out $50K this year anyway, since he only has 5 more years to liquidate, and he can still take the check to a brokerage, open a new 401K, and not pay any additional taxes. He should also take out $50K a year going forward.

[@funtechu]

He actually doesn't have another 5 years - that's why the plan liquidated his account. For inherited 401k accounts where the original owner died prior to the SECURE Act going into effect, the account must be closed 5 years after the date of death. So because he slept on this and didn't do smaller withdrawals over the past 5 years, it all has to be disbursed now.

[@thomasknight604]

5 year ruled. Dave was wrong on the 10-year, wrong on the 60 day rollover, wrong on the RMD rules (saying 1/10th per year), and wrong about the company's business practices

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Used some of that $245,000 to get better cell service!

[@lonetiger1000]

Yeah this is real and a hard lesson to learn..especially in his case. My first fulltime job started withdrawaling a portion of my paycheck after a week for a 401k. It was at a woodshop, so it wasn't as black and white as it typically is. Basically they sent me an email the day after I finished my onboarding saying they would. And I didn't see it, or the opt out within 3 days. Anyway, I wasn't bothered. I knew it was a starter job, but I figured it would be a tiny dab of change I could collect wayy in the future. I only worked there for a year. A sure enough, they sent me what was saved, minus taxes..and then of course I recieved a penalty when I filed that year. At the time I was a kid. I had no clue. But it's how the system works and it's frustrating. Parents need to explain this to their children. Otherwise it's a nasty surprise after their first internship..or in his case, on an inheritance.

[@jareddollar3607]

Dad died in 2018, Secure act doesn’t apply. 5 year deferral is standard if you don’t roll it over.

[@Ka_Gg]

I have a feeling he's been getting tons of letters the last few years saying "transfer to a different IRA before this date or there will be an automatic payout". I'm just now buying there was nothing this whole time. Edit: they just mentioned this after i pushed play again

[@JakeDrives1]

Mansplaning on the Dave Ramsey show. How could he not realize this is his fault before he called in 😂

[@ameliagfawkes512]

Wish you had Ramsay Smartvestors in Scotland!!!!!!!!!!!!! You do need to comprehend that people don't know the ins and outs of the ridiculous maze of taxation, so please be kinder. It might seem simple to you, but it's just not.

[@catherinekoch3735]

I'm pretty sure the fathers 401k ended when he died. The company he worked for/401k must end that relationship with the account after a certain amount of time so issued check less mandatory taxes. I don't think his father's 401k can roll over to sons. The son probably didn't read all the paperwork the 401k company sent before sending the check. The same kind of thing happened with my brother and a 401k he had with a company he no longer worked for, he was issued a check after a year or so, he should had rolled it over and when he didn't they sent a check, but didn't take out taxes and didn't roll it over within the months he should have once check was sent so no longer applicable for rollover.

[@awb19892]

it's better to roll over 401k to a 401k (assuming he has a 401k), not to an IRA. It makes backdoor Roths VERY expensive if you roll it over to a (traditional) IRA.

[@steve8803]

His lack of knowledge is his own fault. Live and learn.

[@user-cn8wu2ok5s]

Anyone reasonable person knows that this company notified him that the money has to be transitioned to an inherited IRA. If the guy has $55000 he can add to it he can get the withheld amount back. Never pays to be lazy with your money

[@enriquericapa933]

From my understanding only the spouse can roll over an inherited 401k from a spouse. A non spouse beneficiary prior to 2020 you had to empty it within 5 year after 2020 it is 10 years. I believe that's why they sent him the check.

[@jimmymcgill6778]

He died 5 years ago. So it was before the new rules. Dave should know that.

[@enriquericapa933]

​@@jimmymcgill6778Dave can be very arrogant and Mr. Know it all at times😂😂. The caller literally can't rollover the 401k it can only be exhausted within 5 years before 2020.

[@DrGilbert-l8l]

Owing my own jewelry store in Chicago has always been a dream, and now that I've expanded to to three store, earing $24k weekly has not only Transformed my business operations but also enabled me to give back to my community and support the church in ways I never through possible. All thanks to God ✝️❤️❤️

[@MaríaSalinas-r2q]

Hello, how do you achieve such biweekly returns? As a single parent I haven't been able to get my own house due to financial struggles, but my faith in God remains strong.

[@MaríaSalinas-r2q]

I'm inspired. Please spill some sugar about the biweekly stuff you mentioned

[@DrGilbert-l8l]

Big thanks to KATE ELIZABETH BECHERER

[@DrGilbert-l8l]

She's a licensed broker here in the state 🇺🇲

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Her top notch guidance and expertise on digital market changed the game for me ‎

[@STEVENZeng-x3o]

80% TURBO 14% XAI317K 2% FLOKI 2%BONK 2%PEPE 🎉

[@Annakerry-rp3pd]

I'm glad you made this video it reminds me of my transformation from a nobody to good home, $34k monthly and a good daughter full of love

[@ArchieHwan]

My advice to everyone is that saving is great but investment is the key to be successful imagine investing $15,000 and received $472,700.

[@DarbyCullen]

wow this awesome I'm 47 and have been looking for ways to be successful, please how??

[@Williamsgr2y]

Getting advice from an expert when building an investment portfolio is a wise choice , as the process can be quite complex

[@Waltere66892]

Making touch with financial advisors like Elizabeth Regina Nelson who can assist you restructure your portfolio, would be a very creative option. Personal financial management will be crucial to navigating the next difficult times

[@Waltere66892]

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[@daretodream...898]

Whew. I inherited my sister's investment accounts. Her death was so traumatic that it took me a year or longer to get everything in my name. And yes ... I am required to take a RMD every year for 10 years to pay taxes on it. RIP my beautiful sister.😢

[@cnewton6527]

It sounds like you might be within one of the exceptions. An individual who is not more than 10 years younger than the IRA owner is not required to take the 10 year distribution. I would check it for yourself if it’s something you don’t want as an option.

[@anthonylewis1980]

Rmd?

[@leonoza7]

@@anthonylewis1980 same here , i dont know what RMD is ..heres the best explanation ive found An RMD is the minimum amount that you must withdraw annually from certain retirement accounts once you reach a certain age, as mandated by the IRS. These withdrawals are taxable as income. Key Details Applies to Specific Accounts: Traditional IRAs SEP IRAs SIMPLE IRAs 401(k) and 403(b) plans (excluding Roth 401(k)s if rolled over to a Roth IRA) Age Requirement: Starting age for RMDs is typically 73 (as of 2024, under the SECURE Act 2.0). If you turned 72 in 2023, you were subject to RMDs under the prior rule. How It Works: The IRS determines the amount using your account balance and a life expectancy factor from IRS tables. You must withdraw at least this amount by the annual deadline (typically December 31). Penalty for Missing an RMD: If you fail to take an RMD, you face a 50% excise tax on the amount not withdrawn. (Starting in 2023, the penalty has been reduced to 25%, and potentially down to 10% if corrected in a timely manner.) Why RMDs Exist RMDs ensure that the government collects taxes on tax-deferred accounts. You can't keep money growing tax-free in these accounts forever. If you have more questions about how RMDs affect inherited accounts or other specifics, let me know!

[@godfathaofyo]

@@anthonylewis1980 Required Minimum Distribution. Law dictates you must take a distribution each year out of the account. Sell off investments to eventually liquidate the account, cannot grow in perpetuity, the government wants its share of the taxes.

[@lindan2288]

@@anthonylewis1980 required minimum distribution

[@Teresa-hl5mn]

Return the check and tell them to reissue another one with the correct amount

[@joyceanderson8045]

Why didn’t he follow up with what restrictions were in place so he could have avoided all of this.

[@mrsterious5845]

Ryan seems very confused about the rules governing INHERITED retirement accounts. Even pre Secure Act beneficiaries of inherited retirement accounts were required to take RMDs annually. The age guidelines governing one's individual retirement accounts do not apply to inherited retirement accounts. If Ryan is confused about that nuance, he is probably confused about other aspects of inheriting a retirement account. He'd be best served by learning the ins/outs on his own OR hiring an advisor to explain everything. Rolling an inherited 401k from the 401k plan into an inherited IRA is a common occurrence.

[@semosancus5506]

Yeah and actually Dave isn't right either. You have 10 years to empty it, whether you do that as 1/10th per year or in any other proportions. Even 100% in year 10. Just depends on how you want the taxes to fall. You can't "roll over" an inherited IRA. It's just straight income to you and you pay your marginal rate on it.

[@heathmcconnell3901]

@@semosancus5506 The IRS recently put out regulations saying that whether or not a person can wait until year 10 to take out 100% of the balance depends on whether the prior owner reached their RMD age (I'll ignore exceptions for spouses, minors, and disabled persons). If the prior owner died before their RMD age, then you're correct. The entire balance must be withdrawn within 10 years, but there are no specific guidelines on when to take it out within those 10 years. The beneficiary can wait until year 10 to take out the entire balance if desired. However, if the prior owner reached their RMD age, then the 10-year rule still applies; but the beneficiary must also take out RMDs in years 1 through 9.

[@FSUSeaPA]

@@semosancus5506 Based on the time stated (5 years after dad's death) it sounds like he died in 2019 - so the beneficiary rules would be the old, pre-SECURE act rules (not the 10 years to liquidate rule)

[@funtechu]

​@@FSUSeaPAWhich to clarify is a 5 year disbursement requirement (which is why the plan closed out after 5 years). SECURE Act actually *increased* the disbursement time.

[@mattesser5027]

​@@FSUSeaPADing! Exactly what I thought. I inherited an IRA from a decedent who passed in 2019...prior to the Secures Act. Thus, the withdrawal schedule is based around my lifespan expectancy at the time. It's pretty wild how that changed, the ability to hold money over years changed drastically.

[@proudliberal24-sv1wo]

I have an inherited IRA. I have to pull it all out within 10 years and pay tax on it.

[@brentgindelberger8851]

Yes, that is because of the Secure Act. If the person had passed before 2020, then you could have stretched it out using RMD tables

[@parkeranderson1172]

This is real. Fidelity will cash you out without warning and then say you need to contribute the extra taxes taken out to claim an “overpayment” when filing. Absolutely crazy.

[@TonyCox1351]

I highly doubt they do it “without warning”. Much like this guy, you probably got an email, and a notification in your account itself

[@joesmith3590]

You mean you don’t know the rules and then get the account closed?

[@funtechu]

This is absolutely not the case. The caller is required *by law* to withdraw all the funds from the account within 5 years of the date of death of the account holder (for an inherited 401k, pre-2019). They could also have rolled it to an IRA if they wanted to. At the end of 5 years, the company is required by law to distribute any remaining funds in the account because it has to be closed by that 5 year date. Fidelity or any other trustee has *no bearing* on what is taxable or not, or what your tax situation is - that is your responsibility.

[@dnah02]

​@@TonyCox1351I don't put it past fidelity they had locked my account multiple times without explaining why, then closed it and refused to explain why. Luckily it was a test account so I got my 2 dollars back.

[@LadyVA0422]

Yes that’s the same thing Costco does. When my mom died they gave me 5yrs to keep her 401k and if I don’t make a decision by yr 5 they will cut me a check and close out the account

[@Fishouta]

Yes, and there are no rollover options in this case

[@1999VR4]

@Fishoutafalse you have 60 days to roll it over when they cut you a check into an inherited IRA

[@stevejohnson9340]

It all sounds like a crock. Government telling me what can/cant be done with my money. Then penalizing me for not doing it.

[@thomasknight604]

This is really really bad advice. The company saved him from a 25% RMD penalty. I have no idea how neither Dave nor Jade knows how inherited IRAs work when this is their careers.

[@michael589m]

Have you look up Jades career? That would explain everything

[@BrianW211]

They do. He has 10 years to withdraw after inheriting.

[@Fishouta]

Did the caller say his age? RMDs don't kick in until you are age 72

[@1999VR4]

@Fishoutathat’s true but for inherited Ira it’s 10 years to take the money out. I didn’t know that. Now I do haha

[@thomasknight604]

@Fishouta his age doesn't matter. 5 year rule

[@ProjectTurtleTech]

I don't know about 99% of things, but when laws pass that change the 1% that I do know it would be nice if it was in the news.

[@eeebee6166]

This is similar to theft. This wasn’t cash in an account, it was an account full of investments that this company took and sold without his consent. If someone took your car and sold it, then gave you the cash and did this without your consent, you would be pissed

[@tjls123]

Did u miss the part about how the company has a 5 year stipulation?

[@eeebee6166]

@@tjls123 at which point they should be transferring the asset to a company that handles investments like literally every other employer does. We had the same situation with my wife’s 401k at a former employer and their letter they sent said we could take a check or it will be automatically transferred an investment company by a certain date. They didn’t do that, they just sold his property without consent you idiot. Clearly you don’t understand what you’re talking about but you sure do have an opinion huh?

[@TonyCox1351]

Guarantee he did consent to it, in the mountains of paperwork he’s signed over the years.

[@FSUSeaPA]

@@eeebee6166 No, they did exactly what they are supposed to do under the law and under the terms of the retirement plan that dead dad's money was in. I do not at all believe that the investment company never attempted to contact him about it; most likely, they mailed stuff to him often and he just ignored it. The investment company would far rather he have rolled it over into an inherited IRA account, so they could continue earning fees on the money in the account.

[@alicelaybourne1620]

@@tjls123 I'm glad I am not the only one that thinks he should be held at least a little responsible for his lack of attention. If this is within a year of the death of his father, I would be surprised by the company policy, but my Dad's had to move within 5 years or it was returned with taxes due. We knew that within a month of his passing. We assumed it wouldn't be held in the account forever.

[@drhoads08]

"No Honey.." lmao...

[@Bcp69]

Sounds like user error... Should've taken care of it right away...

[@FSUSeaPA]

Good lord I hope that guy gets ahold of a knowledgeable tax advisor, because Dave is most certainly not one. He gives a lot of good advice, but he's way off base on this one.

[@cuivre2004]

Dave was somewhat talking in circles and not breaking out of it to explain it differently so the guy would understand. Use an analogy!

[@alinatamashevich3354]

Nope, Dave is spot on.

[@Ka_Gg]

He legit told the guy to get with professionals in his area. He usually says that when he isn't 100% sure on things. He knows that the guy needs more of an expert in this area.

[@thomasknight604]

​@@cuivre2004no, dave was just straight up giving wrong information. It is a 5-year rule not a 10 year rule. The company saved him from a 25% penalty. He was just straight up wrong.

[@thomasknight604]

​@@alinatamashevich3354everything dave said is incorrect. He didn't say a correct thing the entire video.

[@festiva93]

He’s mad that he didn’t follow up. Wah.

[@tjls123]

Exactly, now trying to play the blame game at a pity party

[@robertthompson5908]

Why is Dave jumping to the conclusion that they acted “totally unprofessionally”? He doesn’t know that. Maybe the rules were very clear that the guy had a deadline to roll it over and he just didn’t pay attention or didn’t understand? Sounds to me like it’s on him.

[@zhaofengli103]

come up additional 55k himself. Put it in Ira , and then get a full refund when file taxes return

[@KS-cl8br]

😂😂😂😂 7000 limit on ira

[@July.4.1776]

The guy sat around with his finger up his backside for five years.

[@luv2read963]

I don’t think the caller ever understood the taxes he will owe will come Fromm the 55k the government has and they will refund the rest to him. If he’s making 220k a year he may well have 55k he can add to the 245k to roll over and get it all back. I didn’t think that were really clear on this.

[@royh2618]

I understand why he is in this mess; he is not a good listener.

[@1999VR4]

Nice observation

[@unconditionallove3820]

When you spend your life on the road, you'd understand. He's doing great especially with what the road does to the brain

[@1999VR4]

@@unconditionallove3820 I appreciate it. Actually the road has been great for me. Window time lets me think without having outside disturbances cloud my judgment. I enjoy being a Truck Driver. I guess I’m very blessed that I found something I like to do.

[@johncameron4194]

Why did he wait so long? It’s on him.

[@05645ci]

Am I missing something or did everyone in the US get a check except me?

[@Ka_Gg]

Apparently everyone has a parent, uncle, or grandparent that leaves them a ton of money. Everyone except me and you.

[@edwinroyal9734]

​@@Ka_Ggyeah, i must be related to you. Everyone in my family is broke!

[@mattmooney7056]

Is there not a backdoor Roth option on the now already taxed $245k. Then it could continue to grow it tax free???

[@ColleenMarble]

Well, MY dad and his various now ex-wives blew through every penny he had. I am settling his estate now and there's basically a few boxes of stuff and about 10k after the dust settles - no IRA, no 401k, no house, no car, no nothing. This guy can cry me a river about his $245,000 check and his mistake of not actually doing the work of settling the estate properly.

[@cathieschmitgal5515]

This exact thing happened to my family with Merrill Lynch🤬

[@gvwj]

Dang, I'd be so NOT irritated if someone gave me $250k. The entitlement of myself, I am disgusted with myself.

[@Tehui1974]

It wasn't until the end of the video before I understood why the $55k had been taken out.

[@ronhall5395]

Any good accountant can fix this for him. He will not be able to do this on his own. I bet he got several.letters asking him to move the funds.