How Kimberly-Clark Employees Can Navigate Inherited IRA Changes Without Costly Mistakes

Healthcare Provider Update: Healthcare Provider for Kimberly-Clark: Kimberly-Clark does not typically provide direct healthcare services as a core aspect of its business. However, it does offer healthcare products under its brand portfolio, which includes items like medical gloves and protective wear used in various healthcare settings. The company primarily focuses on consumer products in personal care and hygiene, and while it may collaborate with organizations in the healthcare sector, it is not a traditional healthcare provider. Potential Healthcare Cost Increases for Kimberly-Clark in 2026: As we approach 2026, Kimberly-Clark and its consumers may face significant increases in healthcare costs due to anticipated steep hikes in health insurance premiums. The Affordable Care Act (ACA) marketplace is expected to see rate increases exceeding 60% in certain regions, driven by factors such as rising medical costs and potential loss of enhanced federal premium subsidies. Without intervention, these escalating premiums could drastically affect affordability for millions, with some policyholders at risk of experiencing up to a 75% rise in out-of-pocket expenses. This perfect storm of rising costs could pressure both Kimberly-Clark's employees and consumers, impacting the overall demand for its healthcare-related products. Click here to learn more

'In light of the SECURE Act’s 10-year rule and evolving RMD requirements, Kimberly-Clark employees should approach inherited IRAs with a coordinated distribution strategy that aligns income timing, Medicare considerations, and overall retirement planning, rather than viewing these assets as a simple windfall.' – Michael Corgiat, a representative of The Retirement Group, a division of Wealth Enhancement.

'For Kimberly-Clark employees navigating the updated inherited IRA landscape, proactive distribution planning and careful coordination with overall retirement income can help avoid costly penalties and unintended tax consequences.' – Brent Wolf, a representative of The Retirement Group, a division of Wealth Enhancement.

In this article, we will discuss:

1. How recent changes to inherited IRA rules may impact Kimberly-Clark employees and other non-spouse beneficiaries.

2. Key distribution requirements and tax consequences, including the 10-year rule and RMDs.

3. Strategies for reducing tax exposure through thoughtful planning and professional guidance.

By Neva Bradley, CFP®, Wealth Enhancement

Although inheriting an IRA can feel like a financial windfall, misunderstanding the rules can trigger unexpected tax consequences under current law. Federal legislation and updated IRS guidance have significantly reshaped inherited IRA requirements in recent years, fundamentally changing how many beneficiaries must manage inherited retirement funds. For Kimberly-Clark employees balancing pensions, 401(k) savings, and personal retirement accounts, these changes deserve careful attention.

Because distribution errors can result in unnecessary taxes and penalties, we at Wealth Enhancement assist individuals in making informed decisions regarding inherited IRAs. For Kimberly-Clark employees who may already be coordinating company-sponsored retirement benefits with personal accounts, understanding these inherited IRA rules is especially important.

Unlike your own retirement accounts, inherited IRAs require a completely different mindset. The focus shifts from long-term tax deferral to managing distributions in a tax-efficient manner.

For most beneficiaries, the stretch IRA strategy has effectively come to an end.

For years, certain recipients could “stretch” inherited IRA distributions over their own lifetimes. Today, most non-spouse beneficiaries no longer have that flexibility. Many Kimberly-Clark employees who inherit IRAs from parents or other relatives will now fall under updated distribution requirements.

Under current law, most non-spouse beneficiaries must fully distribute inherited IRA assets within 10 years of the original owner’s death. This rule was established under the Setting Every Community Up for Retirement Enhancement (SECURE) Act of 2019.

IRS guidance further clarifies how the 10-year rule applies, including when annual required minimum distributions (RMDs) are required.

Failure to take a required distribution may result in an IRS excise tax equal to 25% of the amount not withdrawn. If corrected in a timely manner, that penalty may be reduced to 10%, as modified by SECURE 2.0. ¹

Significant Exceptions

Not all beneficiaries are treated the same. Key exceptions include:

- Spouses, who retain broader options as qualified beneficiaries

- Minor children of the original account owner, who may use life expectancy distributions until reaching the age of majority, after which the 10-year rule typically applies

- Certain other qualified designated beneficiaries as defined by IRS regulations

These classifications are outlined in IRS Publication 590-B.

Determining which category applies is an essential first step for Kimberly-Clark employees evaluating their inherited retirement options.

Annual RMDs May Be Required During the 10-Year Period

Within the 10-year distribution window, annual RMDs may still apply depending on the circumstances.

If the original account owner passed away after beginning RMDs, annual distributions are often required in years one through nine, in addition to fully depleting the account by the end of year 10.

If the owner died before the required beginning date, annual RMDs may not be required prior to the final year—but the account must still be fully distributed by year 10.

These rules are clarified in IRS final RMD regulations and related guidance.

Failing to meet these requirements can trigger the same 25% excise tax penalty (potentially reduced if corrected promptly).

Calculating Distributions Correctly

When life-expectancy distributions apply, beneficiaries must calculate required minimum distributions using the IRS Single Life Expectancy Table. After the initial life expectancy factor is established, it generally must be reduced by one each year for subsequent calculations. ²

Using the wrong life table or miscalculating distributions can lead to compliance issues and unnecessary penalties—mistakes that can often be prevented with careful review and proper planning.

Timing Matters: Tax Brackets and Medicare Premiums

Large lump-sum withdrawals from inherited traditional IRAs can significantly increase taxable income in the year taken, potentially pushing a beneficiary into a higher tax bracket. Federal income tax brackets are adjusted annually for inflation.

Inherited IRA distributions can also impact Medicare premium surcharges (IRMAA), which are tied to income thresholds. ³

For Kimberly-Clark employees approaching retirement age, this can influence broader retirement income planning decisions.

Planning Is Essential

An inherited IRA requires coordination with income levels, tax brackets, Medicare considerations, and other elements of a comprehensive retirement strategy.

If you are a Kimberly-Clark employee who has inherited—or expects to inherit—an IRA, professional guidance can help clarify your options and reduce the likelihood of costly missteps.

The Retirement Group collaborates with individuals to develop situation-specific retirement and distribution strategies. You can reach our team by calling (800) 900-5867 for assistance with inherited IRA planning or broader retirement coordination.

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Sources:

1. Internal Revenue Service.  Publication 590-B: Distributions from Individual Retirement Arrangements (IRAs) . Rev. 2024, U.S. Department of the Treasury, 2024,  www.irs.gov/pub/irs-pdf/p590b.pdf .

2. Department of the Treasury, Internal Revenue Service. “Required Minimum Distributions.”  Federal Register , vol. 89, no. 138, 19 July 2024, pp. 58870–58963,  www.federalregister.gov/documents/2024/07/19/2024-14542/required-minimum-distributions . 

3. Centers for Medicare & Medicaid Services.  Medicare Costs for 2026 . CMS Product No. 11579, Dec. 2025,  www.medicare.gov/publications/11579-medicare-costs.pdf .