Inherited retirement accounts and RMDs

My late wife and I were both federal employees and we each had our own Thrift Savings Plan account (TSP). She passed away in 2010 when she was 58 and I was 53. The TSP administrator rolled her account into mine. Must I take required minimum distributions (RMDs) on her portion of the current TSP account in 2025, when she would have turned 73?

No. When her account was rolled into yours, it became your own. Your RMD deadline will be when you turn 73.

As a surviving spouse, you had an option that isn’t available to other beneficiaries. A non-spouse can never transfer an inherited retirement account into his or her own account. But widows and widowers who inherit IRAs and accounts in workplace retirement plans, like the TSP, can choose either to remain on the inherited account as a beneficiary or to roll it into their own retirement account.

There are advantages and disadvantages to both options. The best choice depends on your age and financial situation, and on how old your spouse was when he or she died.

If you roll the inherited assets into your own retirement account, you can postpone taking RMDs until you turn 73. But you can’t take withdrawals before turning 59 ½ without incurring a 10% early withdrawal penalty.

If you remain the beneficiary on the inherited account, you can take distributions immediately without any early withdrawal penalties regardless of your age. But you can only postpone taking RMDs until your deceased spouse would have been 73 years old. You can then stretch those RMDs over your own life expectancy. (Most other beneficiaries must empty an inherited account within 10 years.)

The bottom line:

A surviving spouse can become the owner of his or her deceased spouse’s retirement account.

More information:

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