inherited spousal ira
professor with large 403(b) account dies proior to having to take rmd. spouse is not turning 70 1/2 until mid 2010. How long does surviving spouse have to transfer the 403(b) account to an ira in her name?
thank you very much.
professor with large 403(b) account dies proior to having to take rmd. spouse is not turning 70 1/2 until mid 2010. How long does surviving spouse have to transfer the 403(b) account to an ira in her name?
thank you very much.
Permalink Submitted by Alan Spross on Tue, 2009-11-03 23:11
There is no deadline for doing the IRA direct rollover. She can do it whenever she wants, but there is only a benefit in waiting if her husband died before his RBD. If so, she does not have to take RMDs as a beneficiary until the age he would have turned 70.5. If he is the same age as she is or older, next year would be an RMD distribution year for him, and she could not do the rollover without having the RMD deducted first. If she rolls it over this year, there is no RMD requirement, and her RMD for 2010 would then be based on the total value of her IRAs on 12/31/09.
It would also be better for HER beneficiaries in the future to inherit her owned IRA rather than a beneficiary 403b account. They would not be able to use their own life expectancy if they became successor beneficiaries of her inherited 403b plan.
Permalink Submitted by Jody Howard on Fri, 2009-11-20 14:53
Is this different for 403b’s? I thought Worker Retiree Employeer Recovery Act in late 2008 now required all qualified plans to allow contingent beneficiaries to be named. Unless 403b’s are different, why would you appoint contingents if they can’t use their life expectancy?
Permalink Submitted by Joseph Arsenault on Fri, 2009-11-20 15:33
Alan is making the point that successor beneficiaries cannot stretch the assets based on their own life expectancies, this has nothing to do with contingent beneficiaries. A successor beneficiary is a beneficiary of an inherited retirement plan. If the spouse rolls it into her own plan, the beneficiary would not be considered a successor beneficiary for this purpose.
Also, I was not aware that the WRERA requires plans to allow contingents. They require qualified plans to allow non-spouse beneficiaries to have the option to perform direct-trustee transfers after 2009.
-J