I owe about $10000 on my plus at 6.9-7.6% My inherited ira isn't making any money to speak of. I have about 22000 in the inherited ira. My dividend is about $700 a year
Hi, It's important to note that inherited IRA (also called beneficiary IRA) distributions are not subject to the 10% penalty. Your IRA custodian will denote these as "Death Distributions" and they are not subject to the 10% penalty. However, they will become part of your ordinary income in the calendar year which you take the funds from the IRA. Depending on your tax situation, it may make sense to spread these distributions out over more than one year. Working with a CPA or CFP professional might help you to determine the best course of action.
It also depends on how old the original owner of the IRA was and when you received it. There is no way to avoid paying income tax, but you may be able to avoid the 10% penalty. The 5 year rule says you can take ALL the money out within 5 years of inheriting it.
As for the low rates of return on your inherited IRA, you may want to check your investments. I see that people will often keep the same investments that their parents had and this can be a mistake.
Either way, this is a good time to check with a Certified Financial Planner in your area.