How Long Do You Have to Distribute an Inherited Roth IRA?

Non-spouse beneficiaries who inherit an IRA must use it within 10 years. Certain beneficiaries qualify for preferential tax treatment: these include minor children of the deceased (under 21) as well as chronically ill or disabled individuals.

Beneficiaries who receive withdrawals could, under IRS guidance issued in February 2022, stretch them out over their lifetimes; however, this strategy has proven ineffective for many heirs.

Life expectancy method

If you inherit an IRA from a parent who passed away after 2020, its rules for minimum distributions differ considerably. Nondesignated beneficiaries must follow an annual required minimum distributions (RMDs) schedule based on their life expectancy; furthermore, all funds must be emptied within 10 years and pay taxes accordingly; however, the IRS recently waived penalties for those who miss RMDs during 2021-2022 tax years.

Eligible designate beneficiaries have several choices available to them when taking RMDs, including the life expectancy method and 10-year rule. Which route they select depends on various factors such as account value, age, cash flow needs and future income projections. Before making their choice it is wise to consult both financial planners and tax professionals; missed RMDs carry stiff penalties and an overlooked RMD can incur steep fines; luckily the IRS has made this calculation simpler!

10-year rule

After the death of the IRA owner, their beneficiaries must begin taking RMDs and deplete their accounts within 10 years. There are some exceptions; for example, minor children may use life expectancy payments until age 21 if desired by December 31 of each year postmortem.

Non-spouse beneficiaries have more flexibility when taking distributions from an inherited IRA. They can choose a lump sum distribution, annual payouts or a combination thereof; though this might put them into higher tax brackets.

However, this 10-year rule doesn’t apply to chronically ill or disabled surviving spouses and beneficiaries who still use stretch IRAs to avoid paying taxes on withdrawals – although they must still pay income tax on any inherited accounts prior to reaching the 10-year deadline.

Rollover option

If you receive a distribution from an IRA, its administrator may automatically deposit it into another retirement account (less income tax withholding) in your name (known as autorollover). Or you can request that it be sent directly to another trustee who manages your IRA or retirement plan – a transfer known as rollover; any amount received through this type of rollover transfer will be reported on your tax return.

Beneficiaries who are spouses may opt to treat an inherited IRA as their own and use the Uniform Lifetime Table instead of the Single Life Expectancy Table; this option is unavailable to non-spouse beneficiaries who inherit an IRA.

Under new rules, most beneficiaries of an IRA must begin taking withdrawals beginning either one year posthumously, or 10 years later – these required minimum distributions (RMDs) are known as required minimum distributions (RMD). There are some exceptions, however; specifically in cases involving spousal inherited IRAs.


Inherited IRAs present several challenges and the IRS rules on distributions can be complex, so having an advisor assist with managing them and minimizing your tax bill is critical. Step one should be to verify if they explicitly named you as beneficiary – if so, use life expectancy withdrawals while otherwise follow 10-year rules to stretch out withdrawals over time.

Inherited IRAs can also be split among beneficiaries to avoid the 1% penalty for failing to take Required Minimum Distributions (RMDs). However, it’s important to remember that this option only applies if your loved one passed away before 2020; after 2020, new rules under the SECURE Act may limit your options when inheriting Roth IRAs – read about these changes here.

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