Reply To: RMD

Alan S.

Yes. In an RMD year a qualified plan must distribute the RMD (and any prior RMDs) before rolling over the rest. This should be automatic, since RMDs are not eligible for rollover.

There is no deadline for the spousal rollover. It can be done immediately after the plan accepts you as beneficiary, or 20 years later. But if you stick with the inherited 401k, your RMDs will be smaller and your own beneficiaries will not be able to be treated as designated beneficiaries, only as successor beneficiaries to you.

Therefore, as soon as there is no benefit from keeping the account as inherited, it should be rolled over to your own IRA. The only benefit you might have now is familiarity with dealing with the plan administrator, but most IRA custodians can provide you with any assistance you need.