How to Money · Monday, September 7, 2026
Chris inherited a $300,000 beneficiary 401k and is concerned about depleting it within the 10-year window while minimizing tax impact and maximizing growth. Hosts Joel and Matt discuss strategies like strategic withdrawals, utilizing other tax-advantaged accounts, considering donor-advised funds, and the potential to spend some of the inheritance for personal enjoyment or to honor legacy.
“If I withdraw $30,000 in January, the account could potentially earn that amount back before the end of the year. As a result, despite taking distributions, I'm not reducing the account balance by very much.”
“The tax implications could serve me somewhat, but my bigger question is, what should I do with the money after I take it out of the beneficiary 401k? I'm already fully funding a Roth IRA, and I also have a 401A, 457B, and TSP.”
“And I think especially when we're talking about inheritance, which is if you're doing all the other things right, like you don't have any credit card debt, you're saving and investing a substantial portion of your income, it's okay to incorporate some of those dollars. And I think especially in an attempt to like honor the legacy of the person who who had invested all this money for their own future to use some of it in the here and now is great.”