Changes to inherited governmental 457, 401(a), and 403(b) retirement plans to begin Jan. 1, 2022

Beginning Jan. 1, 2022, in situations where the original governmental retirement account owner of a 457, 401(a), and 403(b) plan passes away, fewer beneficiaries can extend distributions from their inherited account over their lifetime. Instead, many will need to withdraw all assets from the retirement plan within 10 years following the original account holder's death.

Exceptions to the 10-year distribution requirement include assets left to the following eligible designated beneficiaries (EDB):

  • Surviving spouse
  • Minor child of the participant, until the child reaches the age of majority
  • Any permanently disabled or chronically ill individual
  • A beneficiary who is no more than 10 years younger than the decedent

Only these EDBs will continue to have the option to stretch the inherited account over their life expectancy, and a surviving spouse will still be able to treat the IRA as their own.

For inherited IRAs, these new rules have been applied since Jan. 1, 2020.

Return to top