If You Inherited an IRA Recently, You Could Be in for a Mess
When Congress proposes a tax law that affects your retirement plan, should you take steps in anticipation of the change? Sometimes this can work against you. For example, thinking Congress would raise income taxes last year, some taxpayers sold stocks, hoping to pay taxes on their gains at the then current low rates. However, Congress did not raise taxes, and the stock market has since come off historical highs, generating losses in 2022. Trying to save on taxes, these individuals ended up paying taxes a year earlier on stocks valued at market highs. Their strategy failed.
As a general rule, trying to anticipate tax law changes is akin to market-timing your investments: It’s often not a good idea.
