Husband inherits wife’s 401k-both in RMD age

Submitted by John Foster on Tue, 2024-02-06 02:51

An 88 year old husband is the named beneficiary of his 87 year old wife’s 401k. She died in Jan 2024.
She had been taking RMD’s from her 401k but hadn’t taken one yet for 2024.

Does he need to take the RMD prior to rolling it over to a spousal IRA?



Submitted by Alan - IRA critic on Tue, 2024-02-06 03:08

  • Does he want to roll it over to an IRA?  Secure 2.0 section 327 newly allows a sole surviving spouse of a qualified plan to be treated as the participant (owner) and to use the lower Uniform Table for RMDs. Since the wife never rolled this over to an IRA, perhaps husband would be more comfortable leaving the funds there……or not. If he does, he needs to clearly notify the plan that he is electing to be treated as the owner.
  • The 2024 RMD for wife will have to be distributed this year, or if an IRA direct rollover to his own IRA is chosen, the RMD will have to be separately distributed at that time. His own RMDs do not begin until 2025.
  • Depending on estate plans, he might want to consider a measured Roth conversion this year because it is the last year they can file jointly at those lower rates. 

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