Why Market Crashes Can Be a Hidden Opportunity for Inherited IRA Planning
Dec 29, 2025Most investors are taught one rule above all others: don’t time the market. When it comes to long-term investing and growth, that advice generally holds true. But when inherited IRAs and taxes enter the picture, blindly following that rule can be a costly mistake.
Inherited IRAs come with a strict timeline. In most cases, the account must be fully distributed within ten years. Every dollar you take out is taxed as ordinary income. The question is not if you’ll pay taxes, but how much.
This is where market downturns can become a powerful planning opportunity.
Markets do not move in straight lines. Corrections are normal, predictable, and frequent. Historically, we see smaller pullbacks of around 5 percent several times a year, 10 percent corrections roughly every 18 months, and larger declines every few years. While no one can predict the exact timing or severity, we know these events will happen.
When the value of an inherited IRA drops during a market correction, the tax cost of taking distributions drops with it. You’re not withdrawing fewer shares; you’re paying tax on a temporarily lower account value. That can mean paying significantly less to Uncle Sam for the same long-term benefit.
The same logic applies to Roth conversions and tax-loss harvesting. During a downturn, you can convert more assets for the same tax bill, or the same assets for a lower tax bill. Either way, the math works in your favor.
The key is preparation.
Most people miss these opportunities because they are reacting instead of planning. By the time they notice the market has dropped, consult an advisor, and decide what to do, the opportunity has already passed. Market volatility doesn’t send calendar invites.
This is why proactive planning matters. Having a clear strategy in place before a downturn allows you to act decisively when the moment arrives. It’s not about predicting the market. It’s about being ready when normal market behavior creates a temporary advantage.
The biggest mistake people make with inherited IRAs is doing nothing by default. When you don’t actively plan, the government effectively plans for you. Required distributions, compressed timelines, and rising tax rates can quietly erode wealth year after year.
Planning doesn’t always mean taking action immediately. Sometimes the right move is to wait. But waiting should be a deliberate decision based on strategy, not inertia.
Retirement planning is not just about investments. It’s about coordinating taxes, timing, income needs, and long-term goals. When these pieces work together, market volatility becomes something to use, not fear.
If you have an inherited IRA or are approaching retirement, now is the time to evaluate your strategy. A free retirement and tax SWOT analysis can help identify strengths, weaknesses, opportunities, and threats specific to your situation.
To schedule your consultation and start planning proactively, visit
https://www.yields4u.com/pages/book
Being prepared is what separates those who lose opportunities from those who capitalize on them.
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