Can a single sum death benefit be rolled over into another retirement plan?

A single sum death benefit can be rolled over into another retirement plan, typically because the Internal Revenue Service (IRS) permits certain distributions from retirement plans to be rolled over into qualified plans, Individual Retirement Accounts (IRAs), or other similar accounts. This gives beneficiaries the option to defer taxes on the lump-sum benefit, preserving their retirement savings for future use.

In many cases, beneficiaries can roll over the death benefit directly into an IRA or another qualified retirement plan without incurring immediate tax implications. This option is particularly advantageous for maintaining the tax-deferred status of those assets.

The ability to roll over such benefits helps ensure that the funds continue to grow and are available for retirement needs, rather than being immediately taxable when distributed as cash.