My husband passed away in 2018 at age 64, leaving his 401(k) to me as solo beneficiary. At that time, I was 30 years old and he was not yet eligible to take required minimum distributions (RMDs). In 2019, Empower (custodian) transferred the funds to me as named me the account owner. In August this year (2024), Empower contacted me to suggest rolling over the 401(k) into an IRA. They explained that I could either choose an inherited IRA (Traditional and Roth) or roll over the funds into an IRA in my own name. I opted the funds into the inherited Traditional IRA and inherited Roth IRA. Now, in November 2024, I'm wondering if I can still reverse my decision and transfer the inherited IRAs into my own name instead. Is that still an option? - No distribution has started yet.
There is no reversal (or do-over) of a rollover decision once the surviving spouse makes the IRA rollover. However, treating the deceased spouse’s IRA as an inherited IRA can be reversed by the surviving spouse at a later date. The survivor may want to keep the deceased spouse’s funds in an inherited IRA when he/she is under age 59 ½ years in order to avoid incurring the 10% excise tax if needed funds are withdrawn from the inherited IRA. Once the surviving spouse attains age 59 ½, then he/she can make a spousal rollover after that age is attained when the early distribution excise tax is no longer an issue, and perhaps delay taking any further distributions until the surviving spouse attains age 70 ½ .
@@alrocky Don't ever use tax free money and put it into a taxable account like a traditional IRA or 401k. Why take tax free money and make it taxable? Put it into a brokerage and keep your taxable income under the limits to pay 0% capital gains.
@@papasquat355 The daughter in question would not be actually placing the inherited tax free money in traditional 401(k) but it would offset/replace her income used to fund that t-401(k). A t-401(k) would be preferable if she's in a high tax bracket. (Note no mention of t-IRA). She generally should max out Roth IRA and 401(k) before using taxable brokerage account and while a Roth 401(k) perhaps likely better a t-401(k) might be okay.
@@alrocky If she's a high tax bracket earner the roth may not even be an option. Putting the tax free funds into a brokerage is a MUCH better tax play. Capital gains rates are 0%, 15% and 20% depending on taxable income. That is a much better play than using tax free money towards a tax deferred account that will face whatever tax rates we will be facing in retirement.
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My husband passed away in 2018 at age 64, leaving his 401(k) to me as solo beneficiary. At that time, I was 30 years old and he was not yet eligible to take required minimum distributions (RMDs). In 2019, Empower (custodian) transferred the funds to me as named me the account owner. In August this year (2024), Empower contacted me to suggest rolling over the 401(k) into an IRA. They explained that I could either choose an inherited IRA (Traditional and Roth) or roll over the funds into an IRA in my own name. I opted the funds into the inherited Traditional IRA and inherited Roth IRA. Now, in November 2024, I'm wondering if I can still reverse my decision and transfer the inherited IRAs into my own name instead. Is that still an option? - No distribution has started yet.
There is no reversal (or do-over) of a rollover decision once the surviving spouse makes the IRA rollover. However, treating the deceased spouse’s IRA as an inherited IRA can be reversed by the surviving spouse at a later date. The survivor may want to keep the deceased spouse’s funds in an inherited IRA when he/she is under age 59 ½ years in order to avoid incurring the 10% excise tax if needed funds are withdrawn from the inherited IRA. Once the surviving spouse attains age 59 ½, then he/she can make a spousal rollover after that age is attained when the early distribution excise tax is no longer an issue, and perhaps delay taking any further distributions until the surviving spouse attains age 70 ½ .
If a spouse inherits a Roth IRA do they have to roll it into own Roth IRA ro avoid 10 year rule ? Thank u
A spouse should fall under the stretch rule.
If my daughter inherits my roth and has to drain it by end of year 10 where can they distribute it to?
She can spend it, contribute $7,000 to Roth IRA, contribute $23,000 to traditional/Roth 401(k).
@@alrocky Don't ever use tax free money and put it into a taxable account like a traditional IRA or 401k. Why take tax free money and make it taxable?
Put it into a brokerage and keep your taxable income under the limits to pay 0% capital gains.
@@papasquat355 The daughter in question would not be actually placing the inherited tax free money in traditional 401(k) but it would offset/replace her income used to fund that t-401(k). A t-401(k) would be preferable if she's in a high tax bracket. (Note no mention of t-IRA). She generally should max out Roth IRA and 401(k) before using taxable brokerage account and while a Roth 401(k) perhaps likely better a t-401(k) might be okay.
@@alrocky If she's a high tax bracket earner the roth may not even be an option. Putting the tax free funds into a brokerage is a MUCH better tax play. Capital gains rates are 0%, 15% and 20% depending on taxable income. That is a much better play than using tax free money towards a tax deferred account that will face whatever tax rates we will be facing in retirement.
@@papasquat355 *_Backdoor_* Roth IRA is an option.
What's the taxable impacts of a crypto IRA distribution?