Does the beneficiary on a 401(k) override the will?

Usually, yes. The account goes to the person named on the beneficiary form, because it passes outside the will and outside probate.

Can I cash out an inherited IRA?

Yes. A beneficiary can take a lump sum at any time. The taxable part counts as income for that year.

Is there a penalty for withdrawing from an inherited IRA before 59 and a half?

No. The 10% early withdrawal tax doesn't apply to distributions made after the owner's death. Regular income tax still applies.

What happens to a 401(k) if there is no beneficiary?

The plan's rules decide. It may be paid to the estate, and then it goes through probate with the rest of the estate.

Is an inherited Roth IRA taxable?

Mostly not. Contributions come out tax-free. Earnings are usually tax-free too, unless the Roth account was less than 5 years old.

What happens to…

What happens to a 401(k) or IRA when someone dies?

It goes to the beneficiary named on the account, not under the will. A spouse can usually roll it into their own IRA. Most other beneficiaries must empty an inherited account within 10 years. Withdrawals from an inherited traditional account are taxed as income, but the 10% early withdrawal penalty doesn't apply.

Last checked October 14, 2026. General information, not legal or financial advice. Rules vary by state.

Who is the beneficiary?

Choose one to see what usually happens.

Quick facts

Most beneficiaries other than a spouse must empty an inherited 401(k) or IRA by the end of the 10th year after the owner's death (IRS, as of 2026).
The 10% additional tax on early withdrawals doesn't apply to money taken out after the owner's death (IRS, as of 2026).
For deaths in 2020 or later, a surviving spouse can roll the account into their own IRA (IRS, as of 2026).
Earnings in an inherited Roth IRA can be taxable if the Roth account was less than 5 years old (IRS, as of 2026).

Your next step

Who gets a 401(k) or IRA when someone dies?

The beneficiary on file with the plan or the IRA company gets it. The IRS says the owner names beneficiaries under the plan's own procedures, and some plans require a particular beneficiary, such as a spouse.

Because the account has a named beneficiary, it usually passes without probate. If no beneficiary was named, or all of them died first, check the plan or IRA documents. The account may then be paid to the estate.

What is the 10-year rule for inherited IRAs?

Most beneficiaries who are not the owner's spouse must empty the inherited account by the end of the 10th year after the owner's death. They can take money out at any time before then, including all at once.

Some people, called eligible designated beneficiaries, can spread withdrawals over a longer period. The IRS lists a spouse, the owner's minor child, a disabled or chronically ill person, and someone not more than 10 years younger than the owner.

A surviving spouse has the most options. For deaths in 2020 or later, the IRS says a spouse can roll the account into their own IRA. A spouse can also keep it as an inherited account and take withdrawals over their own life expectancy, or follow the 10-year rule.

Do you pay tax on an inherited 401(k) or IRA?

Yes, on most of it. The IRS says beneficiaries must include taxable distributions in their gross income. The 10% additional tax on early withdrawals does not apply to money taken out after the owner's death, whatever the beneficiary's age.

An inherited Roth IRA is different. Withdrawals of the original contributions are tax-free. Most earnings are also tax-free, but earnings can be taxable if the Roth account was less than 5 years old when you take them out.

How do you claim an inherited retirement account?

Find out where the accounts are: the employer's plan administrator for a 401(k), and the bank or brokerage for an IRA.
Tell them about the death and ask who the beneficiaries are.
Send what they ask for, usually a certified death certificate and the beneficiary's identification.
Before you take money out, decide between a lump sum, a rollover and an inherited IRA. A tax professional can help you compare.
Note the deadline. If the 10-year rule applies, the account has to be empty by the end of the 10th year after the death.

Questions people ask

Does the beneficiary on a 401(k) override the will?: Usually, yes. The account goes to the person named on the beneficiary form, because it passes outside the will and outside probate.
Can I cash out an inherited IRA?: Yes. A beneficiary can take a lump sum at any time. The taxable part counts as income for that year.
Is there a penalty for withdrawing from an inherited IRA before 59 and a half?: No. The 10% early withdrawal tax doesn't apply to distributions made after the owner's death. Regular income tax still applies.