Ask Terry Questions How to Withdraw from Deceased Husband’s 40l(k)

How to Withdraw from Deceased Husband’s 40l(k)

By Terry Savage on July 14, 2019 | Financial Planning / Retirement

I have inherited a 401K plan with a major company that belonged to my late husband. This is the month he would have been 70 1/2 and I am dealing with the RMD. I am told I must get a tax adviser to assist in completing the form they sent and to assure it is taxed properly. I am not sure who this person is, a CPA, enrolled agent, or just someone who does taxes. Please advise me as to what their title should be and what credentials they need , and how I can know they are trustworthy. I am in the western suburbs any recommendations are appreciated. Thanking you in advance.

Terry Says

You need someone who is not only a financial planner, but an expert in IRA  withdrawal rules.  You have some time, because withdrawals must be made in the year the decedent would have  reached age 70-1/2 — so by the end of this year.

I have two suggestions.  First, if the 40l(k) plan is managed by Fidelity or Vanguard, they will easily help you calculate the withdrawal amount, and withhold taxes.  The will also advise you to roll it over into an inherited IRA — and continue withdrawing on a set schedule in order to stretch out the growth of the account and minimize withdrawals if you don’t really need them now.

And if the 40l(k) is managed by a not-so-sophisticated custodian, then go to — the website of IRA guru Ed Slott.  When you are there click on the blue side tab to “Find an Advisor” near you.  These advisors can help you personally and they know all the details.

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