New rollover option for 401(k) beneficiaries — Business Management Daily: Free Reports on Human Resources, Employment Law, Office Management, Office Communication, Office Technology and Small Business Tax Business Management Daily

New rollover option for 401(k) beneficiaries

Get PDF file

by on
in Small Business Tax

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.

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.

Related Articles...

Leave a Comment

Previous post:

Next post: