QUESTION: Since I’m single and my kids are
the beneficiary, if they take full solo 401k distribution after my death, would
there be penalty?
ANSWER: Because the solo 401k beneficiary rules would be triggered after your death, the 10% early distribution
penalty would not apply. The solo 401k beneficiary could therefore take a full distribution,
or periodic distributions based on his or her life expectancy. However, federal income taxes would apply to
each or the full solo 401k distribution. Note however that federal income taxes
do not apply to beneficiary distributions taken from the Roth Solo 401k
portion.
Thanks Jane in Arizona
No comments:
Post a Comment