Q. My two children are my 401(k) beneficiaries. If I retire, should I roll over the 401(k) to an IRA? C.B.N., Omaha, Neb.
A. Not necessarily. Previously, it was more advantageous for nonspouse beneficiaries to inherit an IRA than a 401(k). Reason: The 401(k) generally had to be emptied out within five years of death while IRA payments could be stretched over a longer time. However, beginning Jan. 1, 2010, all 401(k) plans must permit rollovers for nonspouse beneficiaries. (Some already do.)
Tip: Other factors, such as the investment mix in the 401(k), come into play. Discuss it with a financial pro.