Inherited 457

Submitted by George McCabe on Tue, 2023-09-12 19:08

Brother is inheriting his deceased brother’s 457 deferred compensation plan (qualified plan). Brother passed in 2023 and DOB was 06-1953. He is rolling the proceeds into an Inherited IRA that he set up upon his brother’s passing. According to the updated IRA rules, the (living) brother (DOB 03-1957) is an Eligible Designated Beneficiary which should allow him to “stretch” the inherited IRA over his life expectancy since he is not more than 10 years younger than the deceased brother? correct? The rollover can be comingled into the existing Inherited IRA and rules apply?



Submitted by Alan - IRA critic on Tue, 2023-09-12 19:18

Yes, the beneficiary is an EDB and can do a direct rollover to an inherited IRA and stretch it over his single life table LE. With respect to combining this direct rollover with another inherited IRA, would need to know more detail regarding the other inherited IRA. DId the beneficiary inherit both a 457 and an IRA?

Submitted by George McCabe on Tue, 2023-09-12 19:20

Yes from the same individual. 

Submitted by Alan - IRA critic on Tue, 2023-09-12 19:44

If the beneficiary inherited both directly (not a successor beneficiary) from brother, the RMD divisors for each account should be the same and therefore they can be combined into a single inherited IRA.

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