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Which, if any, of my tax-advantaged retirement accounts would my spouse be able to access without tax penalties if I die before she is 59 1/2?

I have a 401(k), a Roth IRA, and an HSA. My spouse is listed as the primary beneficiary on all of them.

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401(k) and 403(b) plans may have different rules, depending on the plan (read the plan documents for more details), but in general they can be inherited without tax penalties beyond regular income tax.

Specifically, as a spouse you can typically either take a lump-sum distribution from the 401(k) and pay income tax on it (but not the 10% penalty), or you may usually roll it over into an IRA which further delays the income tax (but then would have a penalty if you withdrew from it after that). See this 401k help article for example, or Topic 558:

There are certain exceptions to this additional 10% tax. The following six exceptions apply to distributions from any qualified retirement plan:

  • Distributions made to your beneficiary or estate on or after your death.

IRAs also have this exception, as is covered in Publication 590 - Ch 2 (Roth IRA) and Publication 590 - Ch 1 (IRA).

In particular, for spouses:

  • Treat it as your own IRA by designating yourself as the account owner.
  • Treat it as your own by rolling it over into your IRA, or to the extent it is taxable, into a:

    • Qualified employer plan,
    • Qualified employee annuity plan (section 403(a) plan),
    • Tax-sheltered annuity plan (section 403(b) plan),
    • Deferred compensation plan of a state or local government (section 457 plan), or
  • Treat yourself as the beneficiary rather than treating the IRA as your own.

Roth IRAs function similarly, though some of the exact mechanics may differ. The only comment other than noting the RMD rules in chapter 2 is:

If the sole beneficiary is the spouse, he or she can either delay distributions until the decedent would have reached age 70½ or treat the Roth IRA as his or her own.

If you designate your spouse as the beneficiary of your HSA, then it becomes her/his HSA and no tax consequence exists. If not, then it becomes her/his and is taxed. See Publication 969 for more detail.

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    Since the Roth IRA is funded with taxed earnings, would she be able to withdraw at least the cost basis immediately without paying income tax, and then roll over the remainder (the earnings) into her own Roth IRA? – Charles Mar 22 '16 at 17:26
  • I made some edits to add additional information. Basically, she can treat it like her own Roth IRA - in which case she can do any of the things you do now. She can also take a distribution (that is what "Treat yourself as the beneficiary") means; that would be without the penalties. Qualified Roth IRA distributions are not taxable income, so I imagine it would be entirely tax-free at that point unless the Roth was less than five years old or has conversions less than five years old. – Joe Mar 22 '16 at 17:35
  • @Joe: For Charles's question, it doesn't have to be a qualified distribution. Contributions to Roth IRA can always be withdrawn any time with tax or penalty. – user102008 Mar 23 '16 at 6:44

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