By Sarah Brenner, JD
Director of Retirement Education
Question:
Hi Ed and team,
If a parent, age 86, inherited their son’s 401(k) after the son passed at age 58, does the parent still have 10 years to withdraw the funds? A lot is discussed about beneficiaries younger than the deceased, but not really beneficiaries that are older.
Thanks!
Janet
Answer:
Hi Janet,
Under the SECURE Act, a beneficiary who is “not more than ten years younger” than the deceased is considered an eligible designated beneficiary (EDB) and can still use the stretch. A beneficiary who is older than the account owner would fit into this category of EDB. If the IRA owner died before required minimum distributions (RMDs) would have had to start, the 10-year rule would also be an option.
In this situation, the parent beneficiary could therefore choose to use the stretch and take annual RMDs over their life expectancy, or use the 10-year rule with no annual RMDs. In this case, going with the 10-year rule may be the better option because the beneficiary is age 86, and their life expectancy would be less than ten years. Additionally, because the account owner was only age 58, no annual RMDs would be required during the 10-year period, which would allow more flexibility in distribution planning.
Question:
Hello!
Can a Roth conversion happen in April for the prior year? For example, could I convert my IRA in April of 2026 and consider it a prior-year conversion for 2025?
As always, thank you!
Calvin
Answer:
Hi Calvin,
While prior-year Roth IRA contributions are permitted, prior-year conversions are not allowed. A conversion done in April of 2026 would be taxable for 2026. For the conversion to be taxable for 2025, it would have to have been done by December 31, 2025.
If you have technical questions you would like to have answered, be sure to submit them to mailbag@irahelp.com, to be answered on an upcoming Slott Report Mailbag, published every Thursday.