Dear Dan, You wrote a while back that rolling a deceased spouse’s IRA into one’s own IRA was the most common choice surviving spouses make but it wasn’t always the best choice. My father is ill so my mom will be dealing with this soon. Rolling it into her IRA seems super simple but if there is a better option, she should know about it.
— Terry in Oviedo, Fla. Dear Terry, I am so sorry to hear of your dad’s illness. Spouses are the only beneficiaries that can roll an IRA into their own account. Everyone else can either take the money and pay the resulting taxes or if they wish to spread the taxable income out some, they can take the account as an inherited IRA. Rolling your dad’s IRA into your mom’s IRA after he passes could be the best choice. It is for a lot of people. If she rolls his IRA into her IRA, it is treated as though she always owned it. That is often simple, easy, and perfectly sensible. So, why would a surviving spouse not roll it into their own IRA? I will give you two examples, both driven by the survivor’s age. If she is younger than 59 ½, and she takes his IRA as a spousal inherited IRA, she could withdraw funds without paying a 10% penalty even while under 59 ½. In contrast, if she rolls it into her own IRA, because the IRA is …
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