Q: I’ve been having trouble managing every password in my life. Is there a service you can recommend that will help me keep track of them all and also keep me safe online?
A: There are multiple ways people deal with the nuisance of passwords, ranging from unsafe to cumbersome. I believe the best solution is to use an online password manager like LastPass. The worst solution is to use the same password for every website or service.
An online password manager can be used across all your devices and it will allow you to easily create complex passwords to ensure enhanced security. With one master password to remember, along with a second layer of added security known as two-factor authentication, it effectively lifts the burden of password management.
Q: Unfortunately, I fell for an online “phishing” scam. I’m now worried that someone could open a credit card or take out a loan in my name. What should I do to limit the damage?
A: You should create accounts with each of the three credit bureaus and place a credit freeze on each of them. This will block all future credit inquiries, effectively making it impossible for fraudsters to open a card or borrow money in your name.
Transunion, Equifax and Experian have now made this process much easier to set up and free. The old process was too complex and carried a cost. Today, it’s free. If you haven’t frozen your credit files, you should do it now.
Q: My father died last year at 70 and I inherited his IRA. I’ve read some confusing advice on how much I need to distribute from my Inherited IRA each year. Can you clear it up for me and explain the tax implications of my inheritance?
A: In 2020, Inherited IRA required minimum distribution rules changed. Essentially, there are now two sets of rules: one for non-spousal beneficiaries who inherited an IRA from someone already required to take minimum distributions (RMDs) and another for those who inherited from someone too young to start their RMDs.
Since you inherited an IRA from your father, and he was under the starting RMD age of 73, you don’t have to distribute money from your Inherited IRA until the end of the 10th calendar year following the year of his death. By the end of the 10th year, you must fully distribute the entire account balance and pay any tax due.
Timing those distributions for the lowest tax obligation is the ultimate goal. You should seek expert tax advice on how to best manage the tax implications of your Inherited IRA distributions. Waiting until that final 10th year is likely a bad plan as it may cause much higher taxes.
