What happens to a 401(k) or IRA when someone dies? The 10-year rule.
The rules changed. Non-spouses usually have 10 years to empty an inherited account; spouses have more options.
Retirement accounts pass by beneficiary designation, not the will, so they usually skip probate. But what you can do with an inherited 401(k) or IRA changed under the SECURE Act, and it trips a lot of people up.
If you're the spouse
You have the most flexibility. You can generally roll the account into your own IRA and treat it as your own, delaying withdrawals until your own retirement.
If you're not the spouse: the 10-year rule
Most non-spouse beneficiaries must empty the entire inherited account within 10 years of the death. There's no more stretching withdrawals over your lifetime, and depending on the situation you may also owe annual withdrawals during those 10 years.
Withdrawals from a traditional inherited account are taxable income to you, so the timing matters. Because the rules are technical and recently changed, this is a good one to confirm with the plan administrator or a tax pro.
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Start →Common questions
Most non-spouse beneficiaries must withdraw the entire inherited IRA or 401(k) within 10 years of the death. The old lifetime stretch is gone.
No. A surviving spouse can usually roll the account into their own IRA and delay withdrawals until their own retirement.