Spousal rollover IRA: your options when you inherit from a spouse

A spousal rollover IRA is what happens when a surviving spouse moves retirement money inherited from their husband or wife into an IRA in their own name. Only a spouse can do this. The alternatives are to treat the deceased's IRA as their own without moving it, or to keep it as an inherited IRA and take distributions as a beneficiary. The right choice usually turns on two questions: does the surviving spouse need access to the money before age 59½, and which spouse is older?

This guide explains the three options the IRS gives a surviving spouse, how the choice affects required minimum distributions (RMDs) and the 10% early withdrawal penalty, the steps to complete a rollover without a tax mistake, and how employer plans differ. Tax rules change, so confirm the current position in IRS Publication 590-B or with a qualified professional before acting.

The three options a surviving spouse has

IRS Publication 590-B sets out the choices for a spouse who is the beneficiary of a traditional IRA. The spouse can:

1. Treat the IRA as their own by designating themselves as the account owner.
2. Roll it over into their own existing or new IRA, or, to the extent it is taxable, into their own employer plan if that plan accepts rollovers.
3. Remain a beneficiary and keep the money in an inherited IRA.

Options 1 and 2 have the same economic result: the money becomes the spouse's own IRA, follows the rules for their own account, and can name new beneficiaries. The difference is mechanical. Treating as own retitles the existing account; a rollover moves the money into another one.

Option 3 is available to every beneficiary, but a spouse gets more favourable terms than anyone else. A surviving spouse is an eligible designated beneficiary, so the general 10-year rule described in our inherited IRA guide does not automatically apply.

Why the 59½ question comes first

Withdrawals from your own IRA before age 59½ are generally subject to a 10% additional tax unless an exception applies. Withdrawals from an inherited IRA are exempt from that additional tax because of the death exception. That is the single most important reason a younger widow or widower might not roll over straight away.

Once the money is in the spouse's own IRA, the death exception no longer applies to it. If the spouse then needs to withdraw before 59½, the 10% additional tax may apply, on top of ordinary income tax.

A common approach is therefore:

• keep the money as an inherited IRA while under 59½ and likely to need some of it; and
• treat it as their own later, once past 59½ or once it is clear the money will not be needed early.

A spouse can generally elect to treat an inherited IRA as their own at any time, not only immediately after the death, so waiting does not usually close the door. Bear in mind the deemed-election rule covered below.

How the choice affects required minimum distributions

If you roll over or treat the IRA as your own

RMDs follow your own age. You do not have to begin until you reach your own required beginning age, and lifetime RMDs are then calculated with the Uniform Lifetime Table, which generally produces smaller required withdrawals than the single-life table used for beneficiaries. Our guide to required minimum distribution age explains the current starting ages, and our RMD calculator shows how a balance converts into a yearly minimum.

If you remain a beneficiary

Publication 590-B gives a sole spouse beneficiary a valuable deferral. If the deceased died before their required beginning date, the spouse does not have to start RMDs until the end of the year in which the deceased would have reached it. After that, RMDs are calculated using the single life expectancy table and recalculated each year.

Which spouse is older matters

Putting those rules together:

Situation	Option that usually defers RMDs longer
Surviving spouse is younger than the deceased	Rolling over or treating as own, so RMDs wait for the survivor's own age
Surviving spouse is older than the deceased	Remaining a beneficiary, so RMDs wait until the deceased would have reached RMD age
Survivor under 59½ and may need the money	Remaining a beneficiary, to keep penalty-free access

These are tendencies, not rules. Taxes, the survivor's other income and estate plans all affect the decision.

The year-of-death RMD

If the deceased had already reached their required beginning date and had not taken that year's RMD before death, the remaining amount must still be withdrawn for that year. RMD amounts can never be rolled over. Take the year-of-death RMD first, then roll over or retitle the rest.

The deemed-election trap

Publication 590-B says a surviving spouse who is the sole beneficiary, with an unlimited right to withdraw, is treated as having elected to make the IRA their own if they:

• make contributions, including rollover contributions, to the inherited IRA; or
• fail to take a required distribution as a beneficiary for a year.

This matters most for the younger spouse who wants to keep inherited status for penalty-free access. Adding money to the inherited IRA, or missing a beneficiary RMD, can convert it into their own IRA without them meaning to, and with it the loss of the death exception for future withdrawals before 59½.

How to complete a spousal rollover correctly

Practical steps that avoid most mistakes:

1. Get the death certificate and claim forms from the custodian. Confirm you are the named beneficiary and whether you are the sole beneficiary.
2. Take any year-of-death RMD that the deceased had not taken.
3. Use a direct trustee-to-trustee transfer where possible. A 60-day rollover, where you receive the money and redeposit it, risks missing the deadline. IRA-to-IRA 60-day rollovers are also limited to one per 12 months across all your IRAs, whereas direct transfers are not.
4. From an employer plan, ask for a direct rollover. An eligible rollover distribution paid to you personally from a 401(k) or similar plan is generally subject to mandatory 20% federal withholding, which you would have to replace from other funds to roll the full amount.
5. Keep Roth and traditional money separate. Inherited Roth money goes to a Roth IRA, not a traditional one.
6. Update beneficiaries on the account once it is yours.

If the spouse is not the sole beneficiary, for example because the IRA names the spouse and children together, the spouse generally cannot treat the whole account as their own. Publication 590-B notes that a spouse who is not the sole beneficiary can still roll over a distribution of their share within 60 days, provided it is not a required distribution. Splitting the account into separate inherited accounts promptly after death is a common first step.

Employer plans and the SECURE 2.0 spousal election

A surviving spouse inheriting a 401(k), 403(b) or governmental 457(b) account usually has similar choices: roll it into their own IRA, roll it into an inherited IRA, or, if the plan allows, leave it in the plan as a beneficiary. Our 401(k) rollover guide covers the plan-side mechanics.

SECURE 2.0 also added a statutory election, effective for 2024 and later, that lets a surviving spouse who is the sole beneficiary of a plan account elect to be treated as the deceased employee for RMD purposes. Under the IRS's proposed regulations, this would let the spouse delay distributions until the year the deceased would have reached RMD age and then use the Uniform Lifetime Table. The details are still being worked through in regulations and plan documents, so ask the plan administrator how it applies.

Inherited Roth IRAs from a spouse

A Roth IRA owner has no lifetime RMDs. A surviving spouse who treats an inherited Roth IRA as their own therefore also has no lifetime RMDs on it, which is often the simplest result. For qualified tax-free withdrawals, the Roth five-year rule still applies; Publication 590-B explains how the deceased's holding period is taken into account.

A spouse who keeps a Roth as an inherited IRA can still take withdrawals without the 10% additional tax, but beneficiary RMD rules may apply, so the trade-off is similar to the traditional IRA case.

The tax picture after a spouse dies

A rollover decision rarely sits alone. In the year after a spouse's death, the survivor usually moves from married filing jointly to single filing status, often with similar income, which can push them into higher tax brackets and raise Medicare premiums. Our article on the widow's penalty tax explains this effect. Larger RMDs from a combined IRA can add to it, so consider the timing of withdrawals and any Roth conversions while still eligible for joint filing in the year of death.

Frequently asked questions

Is there a deadline for a spousal rollover?

There is no fixed deadline to elect to treat an inherited IRA as your own; a surviving spouse can generally do it at any time. A 60-day rollover must be completed within 60 days of receiving the distribution. Remember that missing a beneficiary RMD or contributing to the inherited IRA can be treated as an automatic election.

Should a surviving spouse under 59½ roll over an inherited IRA?

Often not straight away. Money kept in an inherited IRA can be withdrawn without the 10% additional tax because of the death exception. Once rolled into the spouse's own IRA, early withdrawals before 59½ may face that tax. Many younger spouses keep inherited status until they pass 59½.

Can a spouse roll an inherited 401(k) into their own IRA?

Yes. A surviving spouse can roll a deceased spouse's 401(k) into their own IRA, or into an inherited IRA. Ask for a direct rollover so the plan does not withhold 20% federal tax from a payment made to you personally.

Does a surviving spouse have to follow the 10-year rule?

Not automatically. A surviving spouse is an eligible designated beneficiary, so they can roll over, treat the IRA as their own or take life-expectancy distributions as a beneficiary instead of emptying the account within 10 years.

This article is general education, not personal tax or financial advice. Retirement account rules, RMD ages and IRS guidance change, and the right choice depends on your age, income and estate plan, so verify the current rules in IRS Publication 590-B or with a qualified tax professional before acting.