Special Options for Surviving Spouses Who Inherit Retirement Accounts


Surviving spouses don't have to go through probate, usually. Learn more about probate alternatives for surviving spouses.



If you are the surviving spouse of someone who named you as their beneficiary for an IRA or 401(k), you have special options.

  • You can roll the IRA over, and turn it into your own account, which means you don't have to withdraw anything until you are 70 1/2.
  • You can keep the account in the deceased spouse's name as an "inherited IRA," which allows you to withdraw the money without an extra 10% penalty.
  • You can make an "informal rollover" by accidentally contributing to the account, or by failing to make a required withdrawal, in which case it becomes your own IRA.


IRA rollovers are what most surviving spouses end up doing with an Inherited IRA or 401(k). This is only an option for surviving spouses --- all other beneficiaries have to start withdrawing a required minimum amount in the year after the death. There are two primary advantages to doing a rollover:

  • You can wait until you are 70 1/2 to begin required minimum distributions, which means you have longer to have tax deferred growth.
  • You can name your own beneficiaries for the account.

For example, Kate is the beneficiary of Peter's IRA. Peter died at age 62. Kate is 50 and has no need to withdraw the IRA money now. Kate decides to do a rollover with Peter's IRA. She does not need to withdraw the money (or pay taxes on those withdrawals) for more than 20 years (when she reaches age 70 1/2).

Inherited IRA

Keeping an account as an Inherited IRA is another option for a surviving spouse. The best reason to do this is if a spouse is under 59 1/2 years old and needs to withdraw the money. There's no 10% penalty on early withdrawals from an Inherited IRA, although the income taxes will still be due on the withdrawals.

If, however, the decedent was over 70 1/2 when he or she died, and the surviving spouse wants to keep the account as an Inherited IRA, the spouse must start taking required minimum withdrawals by December 31 of the following year.

If the decedent wasn't yet 70 1/2, and a spouse decides to keep the IRA as an inherited IRA, the spouse can defer any required distributions until the year that the decedent would have been 70 1/2.

For example, Janet is the beneficiary of Malcolm's IRA. Malcolm died at age 62 and hadn't begun any withdrawals from his IRA. Janet is 50 and needs to withdraw the IRA money now to pay for her daughter's college education. Janet decides to keep Malcolm's IRA as an Inherited IRA to avoid paying an extra 10% penalty on early withdrawals. In 9 years, when Malcolm would have been 70 1/2, Janet will be required to take minimum withdrawals (if there's money left in the account).

Jurisdictional relevance: US

Legal Consumer - Dodge County, NELaw. The content of this article pertains to all US states and counties.