Spouse’s age at death of primary IRA holder
If my wife is under 59 1/2 when I die, does she have to pay 10 percent penalty to access either my company 401K or IRA? She would ned to take monthy income to live on at that point.
If my wife is under 59 1/2 when I die, does she have to pay 10 percent penalty to access either my company 401K or IRA? She would ned to take monthy income to live on at that point.
Permalink Submitted by Joseph Arsenault on Wed, 2009-06-17 20:02
The 10% penalty dies with the owner who passes away. So she could step into the accounts as an inherited beneficiary and have penalty free distributions.
However it is important to note, if she chooses to roll over the funds to her own IRA or company plan, the 10% penalty will once again apply until she reaches 59 1/2. Often times, a spouse will leave the money in the inherited account of the decedent until she is 59 1/2, then roll it into her own account to stop RMDs until she is 70 1/2. It depends on the individuals needs / goals.
-J