Inherited 401k, need advice

[sakiv]

Hello,

Unfortunately, my mother recently passed away. I have inherited her 401k which has about 120k in it. She also has a IRA with 40k in it.

She passed away in November 2013, and I quit my job January 2014 in order to come home and manage her properties.

Now that I am here, I am looking to invest in more real estate. Could someone advise on the best way to withdraw from her 401k with the least amount of taxes/penalties?

It is my understanding that I will not have to pay any taxes or penalties, besides personal income tax on the amount withdrawn. I am single, and 26 years old with no income at the moment.

Apologies if this is in the wrong section and thank you for your help in advance.

[bjl584]

I'm sorry for your loss.

Do you have plans to find work again soon? Do you have anything saved for retirement? Do you have any debts?

It's hard to answer your question with the info that you gave, but my gut tells me that using your Mom's inheritance to invest in real estate may not be the best course of action.

[sakiv]

I'm sorry for your loss.

Do you have plans to find work again soon? Do you have anything saved for retirement? Do you have any debts?

It's hard to answer your question with the info that you gave, but my gut tells me that using your Mom's inheritance to invest in real estate may not be the best course of action.

Thanks for your kind words.

I have no debt. I have a large amount of work to do around her properties so I will not be returning to work this year. I will be finishing up several projects with my own cash.

A little background, we have been renting out houses for about 10 years, we buy, repair and then place houses on rent. currently I have a few houses that need repairs and I will be taking care of that. I was also looking to buy 2-3 more houses but wanted to know the best way to withdraw cash from her 401k.

[SavingSteve]

I suggest you talk to a CPA who will know the laws in your state and post what you find out here.