Non-Spousal IRA; 401k plan rollover; under 70 1/2
Hi: Rolling over an inherited assets from 401k plan to a (non-spousal bene) IRA Traditional Account. Original holder was under 70 1/2, non-spouse bene over 70 1/2. RMDS must begin by 12/31 following the year of the original acct. holders death or RMDs can be delayed until 12/31 of the 5th year after original acct. holders death, but all assets must be disributed. Is there an option to roll to a Roth inherited IRA? Do the RMD and dist rules apply above in the Roth as well? Thanks in advance!
Permalink Submitted by Alan - IRA critic on Fri, 2015-02-20 17:09
You are correct. Non spouse beneficiary has a choice to do a direct rollover to either an inherited TIRA or an inherited Roth IRA, or could even split between the two if desired. RMDs can begin either under the 5 year rule or life expectancy and are the same for an inherited Roth or inherited TIRA. Direct rollovers should be completed no later than 12/31 of the year following the year of death if beneficiary wants to be sure to avoid any mandatory 5 year rule which could apply in the 401k plan.