<prompt> Human: My grandpa told my wife and I that he plans to leave his 403b retirement untouched, and we will receive it upon his death. I am not sure if he has been withholding taxes on the money. I assume not, isnt that the norm? What taxes will be levied when he passes. Will it be taxed at his current income tax rate?  <response>: You will have to withdraw the money from the 403b and pay tax on the withdrawals as your income at your tax rate. You can do it 3 ways. 1. You can take annual minimum distributions over your life expectency an IRS calculation which could allow most of the principal to continue to grow until your retirement and result in the least tax. 2. You can take the entire balance over 5 years beginning with the year after death. Either some each year or all at once in year 5. 3. You can take it all at once as income. 