The spousal rollover rules give a surviving spouse two main choices for a deceased spouse’s IRA or 401(k): roll the account into your own retirement account and treat it as if it had always been yours, or keep it as an inherited IRA titled in the deceased spouse’s name. A third choice, added by SECURE 2.0 in 2024, lets a surviving spouse who inherits a workplace plan be treated as the deceased employee for required distribution purposes. Which path is best depends almost entirely on your age and whether you’ll need the money before 59½.
Who Qualifies
The full spousal rollover is available only to a legally married surviving spouse who is the sole primary beneficiary of the account. The tax code defines an “inherited” IRA as one acquired by someone who was not the surviving spouse of the deceased owner, which is what carves out the special treatment.1Office of the Law Revision Counsel. 26 U.S. Code 408 – Individual Retirement Accounts A parallel rule for employer-sponsored plans treats a distribution to the surviving spouse as though the spouse were the employee, giving the same rollover rights.2Office of the Law Revision Counsel. 26 U.S. Code 402 – Taxability of Beneficiary of Employees’ Trust
If anyone else is named as a co-beneficiary (adult children, a trust, another relative), the rules shift. See the section below on splitting the account.
Option 1: Roll It Into Your Own IRA
Electing to treat the inherited account as your own is the strongest move for long-term tax deferral. The election erases the account’s inherited status, replaces the deceased spouse’s name with yours, and resets the required minimum distribution clock. RMDs won’t begin until you reach age 73 under current law, rising to 75 starting in 2033.3Internal Revenue Service. Retirement Topics – Required Minimum Distributions (RMDs) A 50-year-old surviving spouse gains over two decades of additional tax-deferred growth.
You don’t always need paperwork to make the election. The IRS treats several actions as an implicit choice to assume ownership: making a contribution to the inherited account, rolling it into an existing IRA, or failing to take an RMD that was due for the year of the deceased spouse’s death. Any of those signals full ownership.
The cost of ownership is that standard IRA distribution rules now apply, including the 10% additional tax on withdrawals before age 59½.4Internal Revenue Service. Retirement Topics – Exceptions to Tax on Early Distributions A younger surviving spouse who might need the money before 59½ can get stuck paying that penalty on withdrawals.
Once the account is in your name, you can also name new beneficiaries. Those beneficiaries will later be subject to the 10-year distribution rule when they eventually inherit the account.
Option 2: Keep It as an Inherited IRA
The alternative is transferring the assets into an inherited IRA (sometimes called a beneficiary IRA) that keeps the deceased spouse’s name on the title. The reason to do this is simple: you can take distributions at any age without the 10% early withdrawal penalty.5Internal Revenue Service. Retirement Topics – Beneficiary Pre-tax distributions still get taxed as ordinary income, but the penalty waiver makes this the right choice for anyone under 59½ who needs access to the funds.
RMDs on an Inherited IRA
The required distribution schedule depends on whether the original owner died before or after their own required beginning date for RMDs.
If the owner died before that date, a surviving spouse has several options:5Internal Revenue Service. Retirement Topics – Beneficiary
- Delay distributions until the year the deceased spouse would have reached the RMD-triggering age.
- Calculate annual RMDs using your own life expectancy, which is often preferable if you’re significantly younger than the deceased spouse.
- Follow the 10-year rule and empty the account by the end of the tenth year after death. This is rarely the best option for a spouse, but it’s on the menu.
If the owner died after the required beginning date, the surviving spouse must continue annual distributions but can recalculate using their own life expectancy.6Internal Revenue Service. Required Minimum Distributions for IRA Beneficiaries
Converting Later
The inherited IRA isn’t permanent. Once you pass 59½ and no longer need penalty-free access, you can convert it into your own personal IRA. That conversion is irrevocable and immediately subjects the account to the personal IRA rules, including the 10% penalty on early withdrawals and the age-73 RMD start. Many surviving spouses treat the inherited IRA as a bridge: use it until 59½, then roll it into their own.
The Age Test
The decision usually comes down to one number. If you’re already past 59½ or have enough other income to cover expenses, roll the account into your own IRA for the longer deferral and the smaller eventual RMDs. If you’re under 59½ and may need the money, keep it as an inherited IRA until you age into the rollover.
Roth IRAs
Rolling a deceased spouse’s Roth IRA into your own Roth is one of the most tax-efficient moves available. Qualified distributions are entirely tax-free, no RMDs apply during your lifetime, and the account can keep growing indefinitely.7Internal Revenue Service. Roth IRAs
Watch the five-year holding period. For earnings to come out tax-free, five years must have passed since the beginning of the tax year of the first contribution to any Roth IRA. When you roll a deceased spouse’s Roth into your own, the original owner’s holding period carries over, so a Roth your spouse opened in 2020 is already past the five-year clock.
You cannot convert a deceased spouse’s Traditional IRA straight into a Roth. The IRS requires two steps: roll the Traditional IRA into your own personal Traditional IRA, then execute a Roth conversion and pay ordinary income tax on the converted amount.
The SECURE 2.0 Workplace Plan Election
Starting in 2024, a surviving spouse who is the sole beneficiary of an employer-sponsored plan can elect to be treated as if they were the deceased employee for RMD purposes. Required distributions are then calculated using the IRS Uniform Lifetime Table based on the deceased spouse’s age rather than the beneficiary life expectancy table.8Federal Register. Required Minimum Distributions
This matters most when the deceased spouse was younger than you. If your husband passed away at 55 and you’re 62, electing to be treated as the employee delays plan-based RMDs until the year he would have reached the RMD age, and the Uniform Lifetime Table usually produces smaller annual distributions than the beneficiary table. The election is irrevocable, so run the numbers first.
Executing the Transfer
Whichever option you pick, move the funds through a direct trustee-to-trustee transfer. The money travels straight from the old custodian to the new one without passing through your hands, which avoids the mandatory 20% withholding on employer plan distributions and sidesteps the 60-day indirect rollover deadline entirely.9Internal Revenue Service. Rollovers of Retirement Plan and IRA Distributions On the paperwork, you must clearly indicate whether you’re rolling into your personal IRA or transferring into an inherited IRA. Getting that wrong creates a processing mess.
If a distribution check is instead made payable to you, you have exactly 60 days to deposit the full amount into a qualifying retirement account. Miss the window and the entire distribution becomes taxable as ordinary income.10Internal Revenue Service. Topic No. 413, Rollovers From Retirement Plans The IRS can waive the deadline in limited circumstances such as federally declared disasters, but counting on a waiver is a gamble.
A 401(k) distribution check comes with a built-in trap: the plan administrator must withhold 20% for income taxes before cutting the check.11eCFR. 26 CFR 31.3405(c)-1 – Withholding on Eligible Rollover Distributions To roll over the full balance, you have to replace that 20% from your own pocket within 60 days, then recover it as a tax credit at filing. A direct transfer avoids the whole problem.
Year-of-Death RMDs
If the deceased spouse had an RMD due for the year of death and hadn’t taken it, you must take that distribution before completing the rollover. The year-of-death RMD belongs to the deceased, cannot be rolled over, and is taxed as ordinary income to you.6Internal Revenue Service. Required Minimum Distributions for IRA Beneficiaries
Missing a required distribution triggers an excise tax of 25% of the shortfall. Under SECURE 2.0, that penalty drops to 10% if you correct the mistake within the correction window, which generally runs through the end of the second tax year after the year the RMD was missed.12Office of the Law Revision Counsel. 26 U.S. Code 4974 – Excise Tax on Certain Accumulations in Qualified Plans To fix a missed RMD, withdraw the shortfall as soon as possible and file IRS Form 5329 for the year it was missed. You can request a waiver on the form by writing “RC” (reasonable cause) next to the penalty line and attaching a letter explaining what happened.13Internal Revenue Service. Correcting Required Minimum Distribution Failures The IRS has historically been generous with waivers when the surviving spouse can show a custodian delay or the confusion that follows a spouse’s death, but the waiver isn’t automatic.
If You’re Not the Sole Beneficiary
The full personal-IRA rollover is available only when you are the sole primary beneficiary. If children or other heirs share the designation, you lose access to the personal IRA election for the whole account unless the account is split into separate inherited IRAs for each beneficiary by December 31 of the year after the owner’s death. Once your share sits in its own inherited IRA titled in your name as beneficiary, you can take distributions under the inherited IRA rules without the 10% penalty, and you can later roll your portion into your own IRA.5Internal Revenue Service. Retirement Topics – Beneficiary
Miss that December 31 deadline and all beneficiaries may be forced to use the oldest beneficiary’s life expectancy for RMD calculations. For a surviving spouse sharing an account with adult children, that often means significantly accelerated distributions. It’s one of the first deadlines to address after a spouse’s death, and it’s the one most often missed.