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Retirement Plans
Employment & Benefits
Frequently Asked Questions
Legal
What are the rules for inheriting an IRA?
Rules depend on your relationship to the deceased. Surviving spouses can roll the IRA into their own IRA and defer distributions until their own retirement. Non-spouse beneficiaries (under the SECURE Act of 2019) generally must withdraw the entire balance within 10 years of death—there are no annual required minimums during that period, but the account must be fully distributed by December 31 of the 10th year. Exceptions exist for minor children, disabled individuals, and beneficiaries less than 10 years younger than the deceased.
What are required minimum distributions (RMDs) for the year of death?
If the deceased was over 73 (the current RMD age) and had not yet taken their full RMD for the year of death, the beneficiary must withdraw the remaining RMD amount by December 31 of that year. This applies to traditional IRAs, 401(k)s, and other tax-deferred retirement accounts. The RMD is calculated based on the deceased's age and the account balance on December 31 of the prior year. Failure to take the RMD results in a 25% penalty on the amount not withdrawn (reduced to 10% if corrected within 2 years).
Process
How do I claim a 401(k) as a beneficiary?
Contact the plan administrator (typically the deceased's employer's HR department). You will need: a certified death certificate, your government-issued ID, and the plan's beneficiary claim form. Surviving spouses have the option to roll the funds into their own IRA, leave them in the plan (if the plan allows), or take a lump-sum distribution. Non-spouse beneficiaries can typically roll funds into an inherited IRA or take a lump sum. Processing takes 2-8 weeks after submitting complete paperwork.
Costs
What about pension survivor benefits?
If the deceased had a pension (defined benefit plan), survivor benefits depend on the payment option they elected at retirement. If they chose a joint-and-survivor option, the surviving spouse continues receiving a percentage (typically 50%, 75%, or 100%) of the pension for life. If they chose a single-life option, payments stop at death. Contact the pension plan administrator with a death certificate to determine what was elected and file for survivor benefits. Some plans also offer a small lump-sum death benefit.