By Andy Ives, CFP®, AIF®
IRA Analyst


Hi, I inherited my husband’s 401(k) when he died last year. I kept the assets with the 401(k) administrator, believing I had to do that to take distributions without 10% penalty. (I am under 59 ½ years old). If I roll over the 401(k) to an inherited IRA, will I still be able to take penalty-free distributions?

Thank you




Yes, if you transfer the 401(k) plan dollars to an inherited IRA, you can still access those funds without penalty. An additional option is, at age 59 ½, you can do a spousal rollover and combine the inherited IRA assets with your “regular” IRA dollars if you have any. This consolidation should help reduce paperwork and administrative responsibilities. Based on your age at that time, you will have full access to all IRA dollars.



First, thank you for the great information you provide.  I have already read Ed’s new book 2 times and am beginning to make plans and take action on what I read.

In 2004 I inherited an IRA and I used the knowledge that I had read in one of Ed’s books to help the advisor title the IRA correctly to make it a stretch IRA. I still have it today, no “smash and grab” here. (I heard Ed say this on a show he was on.)

I am in the process of writing important information to my children and one of them is about my inherited (stretch) IRA, since I will be leaving it to them.

I was looking for how they need to title it and found your article from August 02, 2017.

Once again, great information here. I was wondering if you might consider updating this article to include how the SECURE Act now impacts inheriting an inherited IRA.

If they title the IRA correctly to continue it as a stretch IRA, will just the 10-year rule apply, or will they have to continue (at a minimum) taking what my RMD would have been each year and, of course, still have it drained by year 10?

Thank you,




Thank you for being a loyal reader of our material! We wrote an update to the successor beneficiary rules and how they were impacted by the SECURE Act back on January 27, 2020. The link is here:

In your situation (and as explained in the January 2020 Slott Report article), the question as to what a successor beneficiary can do with an inherited IRA has an easy answer: a successor beneficiary gets the 10-year payout. In your situation, since the IRA you have is already an inherited IRA, your children can no longer “step into your shoes” to continue the stretch payments. They are bound by the 10-year payout. This is true even if the successor beneficiary is an “eligible designated beneficiary” (i.e., a surviving spouse, minor child, disabled or chronically ill individual, or not more than 10 years younger than the account owner). Under the SECURE Act, successor beneficiaries get the 10-year payout.