(Closed) Experience with inheriting 401k?

posted 4 years ago in Finances
Post # 2
1332 posts
Bumble bee
  • Wedding: May 2014

FutureDrAtkins:  My experience is that the only benefits one can inherit, which would remain non-taxable is a life insurance policy, to my knowledge.  Which means it is paid out without it adding income to the beneficiaries.  Other accounts, such as (I believe) 401K, IRA’s, etc, can be paid out, but it would be considered taxable income for you, which is why it good practice to re-invest those investmentes; whether you transfer the monies into your own IRA, mutual funds, etc.  

Definitely seek a financial advisor, who can best direct you, but make sure it is someone you trust, because you want someone who has YOUR best interest in mind, and not their own (because they too could have an agenda in mind…).  

That sucks it is taking so long 🙁 There are many hurdles to jump over when dealing with someone’s money who is no longer here with us.  My mom passed away in 2011, and we just finalized her money/funds, etc.  It took us almost 4 years to go from point A to Z.  Granted, most was completed within 6 months to a year, but there was still items out there that we spent many years investigating.  “We” being my sister, who was her beneficiary.  

So, hang in there, and be ‘careful’.  It could be detrimental to have some of this be income for you, as far as tax purposes go!!!  Sorry about your loss too 🙁

Post # 3
162 posts
Blushing bee

FutureDrAtkins:  Someone brought this up on a finance radio show today and the advice was to rollover directly in a Roth IRA. If you get it paid out to you, you will only get 80% of it, whereas if it’s rolled over, you get the full amount.

Post # 4
180 posts
Blushing bee
  • Wedding: December 2015

I don’t know the answer but I thought I’d say the reddit personal finance thread is usually good for more unique situations like this. 

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