Spouse Inherited 401k

Submitted by Alan Bewley on Tue, 2022-08-02 01:40

I was recently introduced to a widow who lost her husband on 9/11. Her advisor never had her roll his employer 401k into an IRA in her name as she was the sole beneficiary. Her deceased husband would’ve turned 72 this year so the custodian is telling her she must take RMD based on his life expectancy (she is 63). I agree with this part b/c she did not roll it out prior to his RBD.

My question is once she takes this year’s RMD based on HIS life expectancy, can she then roll it into her own IRA and use her age and life expectancy for RMD purposes? In other works, no more RMD until she turns seventy-two?

Thank you,

Alan



Submitted by Alan - IRA critic on Tue, 2022-08-02 03:31

  • Some issues here. If husband would have reached 70.5 after 12/31/2019, her RMDs must begin this year, the year he would have reached 72. However,  if he would have reached 70.5 prior to 2020, then her RMDs should have started in 2019, the year he would have reached 70.5. 
  • Her beneficiary RMDs when required are based on HER life expectancy, not his, based on her age in the year her beneficiary RMDs need to begin. If this is the year her beneficiary RMDs begin, she must take the correct RMD before she can roll over the balance to her own IRA. But once in her own IRA, RMDs cease until the year she reaches 72. 


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