Inherited
We have a lady who has inherited her husband’s 401(k). They were both 56. Could she put that into her own IRA without tax consequences or does it have to be put into an Inherited IRA? She is not needing the income anytime soon.
We have a lady who has inherited her husband’s 401(k). They were both 56. Could she put that into her own IRA without tax consequences or does it have to be put into an Inherited IRA? She is not needing the income anytime soon.
Permalink Submitted by Alan - IRA critic on Tue, 2017-11-14 00:38
She can roll it into her own IRA, however any distributions she takes from that IRA will have a 10% penalty until she reaches 59.5. If she thinks she may need any funds from the 401k, she should transfer it into an inherited IRA or leave it in the 401k until she is 59.5. Note that she will NOT have any beneficiary RMDs due until the year her husband would have reached 70.5, which is also the year her own RMDs begin since they were the same age. In other words, no RMD will be due until she reaches 70.5 whether the account stays inherited or is rolled over to her own IRA.