Ex-spouse beneficiary of a pension
I have a client who is the beneficiary of her ex-husband’s pension. He was 59 when he passed and she is currently 54. Does the pension fall under the 10 year rule or could she do a spousal rollover into her own IRA?
Permalink Submitted by Alan - IRA critic on Mon, 2021-08-16 18:34
If they were no longer married at the time of his death, she is a non spouse beneficiary, but is also eligible for the stretch based on her life expectancy because she is not more than 10 years younger than the decedent. But she cannot roll it over to her own IRA since she is not a spouse, and must maintain the inherited IRA in beneficiary form and take annual RMDs unless she opts for the 10 year rule, which in almost all cases would not be a wise decision.