Non Spousal Inherited 401k
I have a client who is a beneficiary on her deceased sister’s 401k. She would like to transfer the balance to her employer’s 403b plan. Is this allowable? Are there any “special” rules that must be followed post transfer i.e. if her sister was 70-1/2 must she take RMDs out?
Permalink Submitted by Alan - IRA critic on Mon, 2015-08-10 20:56
She can only transfer the death benefit to an inherited IRA or inherited Roth IRA. She cannot transfer it into an owned 403b account or even a separately maintained inherited 403b plan transferred to her current employer plan. If her sister passed after her required beginning date (RBD), the client must receive the incompleted RMD amount for the year of death. However, if her sister was still working when she passed, even if over 70.5, there would be no RMD for the year of death because she would have passed prior to her RBD.