What are the RMDs for ROTH IRA Accounts?

Roth IRAs are unique retirement accounts that offer tax-free growth and withdrawals, provided certain conditions are met. One of the most attractive features of a Roth IRA is that the original owner never has to take Required Minimum Distributions (RMDs). However, this changes when the account is inherited by beneficiaries. Understanding the rules surrounding RMDs for inherited Roth IRAs is crucial for effective estate planning and ensuring compliance with tax laws.

No RMDs for Roth IRA Owners

As long as the owner of a Roth IRA is alive, there is no requirement to take distributions from the account. This is a significant advantage over traditional IRAs, which mandate RMDs starting at age 73. This feature allows the funds in a Roth IRA to continue growing tax-free for the owner’s entire lifetime.

RMD Rules for Beneficiaries

When a Roth IRA is inherited, the rules change. Most beneficiaries must empty the inherited Roth IRA by the end of the 10th year following the original owner’s death. This rule applies to most non-spouse beneficiaries, including adult children and other relatives. However, there are no annual RMDs required during these 10 years, allowing for flexibility in when the distributions are taken.

Tax Implications for Beneficiaries

Distributions from an inherited Roth IRA are generally tax-free, provided the account has been open for at least five years. This five-year rule applies to the entire account, not just individual contributions. Therefore, beneficiaries can enjoy tax-free withdrawals, which can be a significant financial advantage.

Special Beneficiaries

A specific group of beneficiaries, known as “eligible designated beneficiaries,” have more flexibility. These include:

  • The surviving spouse of the original account owner
  • The minor children of the original account owner (until they reach the age of majority)
  • Disabled or chronically ill individuals
  • Individuals who are not more than 10 years younger than the original account owner

These special beneficiaries can choose to take RMDs over their own life expectancy instead of being required to empty the account within 10 years. This option can help stretch the tax-free growth of the Roth IRA over a longer period, potentially providing more significant financial benefits.

Options for Surviving Spouses

Surviving spouses have additional options when inheriting a Roth IRA. They can either remain a beneficiary of the inherited Roth IRA or roll it into their own Roth IRA. Typically, rolling it over into their own Roth IRA is the better option, allowing the funds to continue growing tax-free without the requirement for RMDs.

However, there are situations where remaining a beneficiary might be more advantageous. For instance, if the surviving spouse is under 59 1/2, they can take tax- and penalty-free withdrawals from the inherited Roth IRA. In contrast, if they roll the funds into their own Roth IRA, they would be subject to the 10% early withdrawal penalty if they take distributions before reaching 59 1/2. This flexibility allows the surviving spouse to access funds as needed without incurring penalties, while still retaining the option to roll over the inherited Roth IRA into their own account later on.


Roth IRAs offer significant benefits for retirement planning, particularly due to the absence of RMDs for the original account owner. However, the rules change when the account is inherited. Understanding the RMD requirements for beneficiaries, the tax implications, and the options available to special beneficiaries and surviving spouses is essential for maximizing the benefits of a Roth IRA.

Given the complexities of these rules, consulting with an independent Fee-Only financial adviser can be invaluable. They can provide personalized guidance to ensure compliance with tax laws and optimize the financial benefits of your Roth IRA.

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