Spousal Inherited IRA, New Rules?

Submitted by Renee Grey on Tue, 2019-08-27 19:15

Sorry if this has been addressed, but I can’t find a link.

A year ago Spouse age 62 passed away, leaving husband age 56 as sole beneficiary on IRA. Since the survivor is under age 59.5, he elected to keep the IRA as an inherited IRA in case he needs to access prior to age 59.5 to avoid 10% penalty. After he turns 59 ½, the thought is to move it to his own IRA to delay the RMD for a couple more years and allow his new beneficiary the option for a stretch over the beneficiary’s life. Has this rule changed? Will the surviving spouse no longer be allowed to move the inherited IRA to his own IRA, thus potentially impacting the new beneficiary options? I’ve heard talk that the rule changed, but am unable to find any sources. Thanks.



Submitted by Alan - IRA critic on Tue, 2019-08-27 20:00

  • None of these rules have changed, and if the Secure Act or version of it passes, that would not change the spousal rollover rules either. In addition, future changes will apply only to deaths that occur after the law goes into effect, not for IRAs inherited earlier.
  • For your example here, the husband can do the spousal rollover when reaching 59.5, but there is no downside for waiting up to 7 years either. After the year that deceased spouse would have reached 70.5. then there are major downsides for not having rolled over the inherited IRA.

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