How to Leave an Inheritance Without Leaving a Tax Bill
For many University of Rochester professionals, retirement planning is not only about the years ahead. It is also about what happens to your savings after you are gone.
You want to leave something meaningful for your family or the causes you care about. Yet without the right planning, the inheritance you hope will help the next generation can create a tax problem you never intended.
How the SECURE Act Changed the Landscape
Before 2020, children who inherited retirement accounts could “stretch” withdrawals over their lifetime. That approach allowed taxes to be spread out and often kept annual tax bills manageable.
Today, the rules are very different.
Under the SECURE Act, most non-spouse beneficiaries must fully empty an inherited 403(b) or IRA within ten years.
For families inheriting large retirement balances, that ten-year window can dramatically increase the tax burden. This is often the moment people realize that well-intended saving can create unintended consequences for the next generation.
Why This Matters for University of Rochester Professionals
Many University of Rochester faculty and staff have accumulated significant savings inside their TIAA 403(b). That success can unintentionally create challenges for heirs:
Larger withdrawals over ten years can push beneficiaries into higher tax brackets
Distributions often occur during their highest-earning years
More of your hard-earned savings goes to taxes instead of your family
It is rarely the legacy people intend to leave.
Legacy Planning Is More Than a Will
Estate planning is not only about documents. It is about designing a legacy that is tax-efficient, intentional, and aligned with your values.
A coordinated approach can help you:
Use Roth conversions to shift money into accounts with tax-free inheritance potential
Make charitable gifts directly from retirement accounts to reduce taxable income
Structure withdrawals during retirement in a way that preserves flexibility for heirs
Ensure beneficiary designations reflect your long-term goals
With a thoughtful plan, you can reduce the tax impact on your loved ones while increasing the meaning of what you leave behind.
How Professional Guidance Fits In
If you have spent decades saving during your University of Rochester career, you have already done the hard part. The focus now shifts from accumulation to stewardship.
A fiduciary advisor can help you:
Understand how SECURE Act rules affect your family
Evaluate whether Roth conversions could reduce future tax burdens
Coordinate income, estate, and charitable strategies
Create a clear legacy plan that reflects what matters most to you
Whether you work with me or someone else, an integrated strategy helps ensure your life’s work benefits the people and causes you care about most.
Final Thought
You spent years building your savings with intention. With the right planning, you can leave an inheritance that provides support, stability, and meaning without saddling your loved ones with an unnecessary tax bill.
If you are a University of Rochester professional thinking about the legacy you want to leave, now is the time to design a strategy that protects both your family and your life’s work.
Ready to Align Your Legacy With a Tax-Smart Retirement Plan?
We will review your accounts, beneficiaries, tax exposure, and long-term goals so you can leave a legacy that truly reflects what matters to you.
Schedule your Retirement Strategy Session
The Pitti Group Wealth Management, LLC (“The Pitti Group”) is a registered investment advisor. Advisory services are only offered to clients or prospective clients where The Pitti Group and its representatives are properly licensed or exempt from licensure.