Do Roth IRAs Have a Required Minimum Distribution?
A primary Roth IRA benefit is avoiding required distributions, but this advantage doesn't automatically apply to those who inherit the account.
A Roth Individual Retirement Arrangement, or Roth IRA, is a retirement savings account where contributions are made with money that has already been taxed. A Required Minimum Distribution, or RMD, is a yearly withdrawal mandated by the government from most retirement accounts after the owner reaches a certain age. This requirement ensures the Internal Revenue Service (IRS) can collect tax revenue from tax-deferred accounts. Savers are often confused about how RMD rules apply to the tax structure of a Roth IRA.
RMD Rules for the Original Roth IRA Owner
During the lifetime of the original owner, a Roth IRA has no Required Minimum Distributions. You can leave funds in the account to grow for as long as you live without being forced to take withdrawals. This rule exists because contributions are made with after-tax dollars, so the IRS has no deferred income tax to collect. In contrast, traditional retirement accounts like a Traditional IRA or 401(k) require distributions to begin once the owner reaches age 73, an age scheduled to increase to 75 in 2033.
RMD Rules for Inherited Roth IRAs
When a Roth IRA is passed to a beneficiary after the original owner’s death, the RMD rules change. The lifetime RMD exemption does not transfer to the inheritor. The specific requirements depend on the beneficiary’s relationship to the original owner, and the rules were altered by the SECURE Act.
Spousal Beneficiaries
A surviving spouse who inherits a Roth IRA has flexible options. The most common choice is to treat the inherited Roth IRA as their own through a spousal transfer, rolling the assets into their own Roth IRA. By becoming the new owner, the surviving spouse is not required to take any RMDs during their lifetime. Alternatively, a surviving spouse can choose to remain a beneficiary of the account, which subjects them to the distribution rules that apply to non-spouse beneficiaries.
Non-Spouse Beneficiaries (The 10-Year Rule)
Most non-spouse beneficiaries, such as children or other relatives, are subject to the “10-Year Rule.” This rule requires the entire balance of the inherited Roth IRA to be distributed by December 31 of the 10th year after the original owner’s death. For example, if the owner died in 2025, the beneficiary must empty the account by December 31, 2035. There are no annual RMDs required within this 10-year window, and the beneficiary can take withdrawals of any amount at any time as long as the final balance is zero by the deadline.
Eligible Designated Beneficiaries (EDBs)
Certain non-spouse beneficiaries are classified as Eligible Designated Beneficiaries (EDBs) and are exempt from the 10-year rule. This category includes individuals who are disabled or chronically ill, and minor children of the original account owner. EDBs are permitted to take distributions over their own life expectancy, a method known as the “stretch” provision, which allows for smaller, annual RMDs. The annual withdrawal amount is calculated using IRS life expectancy tables.
For minor children, a specific condition applies. Once a minor child beneficiary reaches age 21, the 10-year rule is triggered, and the remaining account balance must be withdrawn within the next 10 years.
Penalties for Missed RMDs
Failing to take a required distribution from an inherited Roth IRA by the deadline results in financial penalties. The IRS imposes an excise tax on the amount that was required to be withdrawn but was not. The standard penalty is 25% of the RMD shortfall. For example, if a beneficiary was required to withdraw $10,000 but only took $2,000, the penalty would be 25% of the $8,000 shortfall, or $2,000. Qualified distributions from a Roth IRA remain tax-free.
If the beneficiary corrects the mistake by withdrawing the required amount within two years, the penalty can be lowered to 10%. It is also possible to request a complete waiver of the penalty. To seek a reduction or waiver, the beneficiary must file IRS Form 5329 and may need to provide a letter explaining that the failure was due to a reasonable error.