Combining 403(b) Death Proceeds with a Traditional IRA

Q. Can 403(b) death proceeds be combined with a traditional IRA to form a new inherited IRA?

A. A beneficiary can roll over from a 403(b) into an inherited IRA. If the inherited IRA has already been established and is paying a required minimum distribution (RMD) based on the RMD rules of the decedent under that IRA plan, it may be a better idea to rollover into a separate inherited IRA. Also, when rolling from a 403(b) into an IRA, generally the distribution rules from the 403(b) are picked up by the IRA unless it is done by the end of the year following the year of death; then the IRA RMD default is used.