Understanding Inherited Roth IRAs and The Ten Year Rule

The inherited Roth IRA 10 year rule requires most non-spouse beneficiaries to empty an inherited Roth IRA by December 31 of the tenth year after the original owner’s death, but it does not require any withdrawals in years one through nine. That single point causes more confusion than anything else in this area, because the rule behaves differently for an inherited traditional IRA.

Last reviewed: July 2026 | Written and reviewed by Craig Wear, CFP®, Q3 Advisors

The inherited Roth IRA 10 year rule, explained

The 10-year rule comes from the SECURE Act of 2019. For IRA owners who die after December 31, 2019, a designated beneficiary who does not qualify as an eligible designated beneficiary must have the entire inherited balance distributed by the end of the tenth calendar year following the year of death (Source: IRS, Retirement topics – Beneficiary, irs.gov). Before this change, many beneficiaries could “stretch” distributions across their own lifetimes. That option now survives only for a narrow group described below.

The rule counts calendar years, not 365-day periods. If the original owner died in 2025, the tenth year is 2035, and the account must be empty by December 31, 2035. Deaths that occurred in 2019 or earlier generally fall under the older rules and are outside the scope of this guide.

Do you owe annual RMDs on an inherited Roth IRA?

This answers the most common version of the question, “are inherited Roth IRAs subject to the 10 year rule,” and the answer has two parts. Yes, most non-spouse beneficiaries are subject to the year-10 deadline. But no, they do not face the annual RMD schedule that catches beneficiaries of some inherited traditional IRAs.

Here is the mechanism. A traditional IRA owner has a required beginning date tied to age 73 (Source: IRS, RMD FAQs, irs.gov). If a traditional IRA owner dies on or after that date, the IRS final regulations that apply for years beginning in 2025 require the beneficiary to continue annual RMDs in years 1 through 9 and empty the account by year 10. A Roth IRA owner, by contrast, never takes lifetime distributions regardless of age (Source: IRS Publication 590-B, 2025). Because a Roth owner is always treated as dying before a required beginning date, the annual-RMD branch of the rule can never attach to an inherited Roth IRA. Only the year-10 deadline applies.

Inherited Roth IRA vs. inherited traditional IRA under the 10-year rule

Source: IRS Publication 590-B (2025) and IRS Retirement topics – Beneficiary, irs.gov.

Because a traditional IRA generally becomes taxable income to heirs, some owners look at a Roth conversion during their lifetime so that what passes on is Roth money rather than pre-tax money. If you also hold traditional retirement accounts, the separate rules for required minimum distributions in 2026 may apply to those accounts even though they do not apply to an inherited Roth.

Are inherited Roth IRA withdrawals tax-free?

Tax-free treatment is a main reason a Roth inheritance is often described as favorable, but it is not automatic. The distribution has to be “qualified,” which for an inherited Roth turns primarily on the five-year holding period below.

The 5-year holding period for an inherited Roth IRA

The five-year clock does not restart when you inherit. It carries over from the original owner and counts from January 1 of the year the deceased first established and funded any Roth IRA (Source: IRS Publication 590-B, 2025). If the original owner opened their first Roth IRA in 2018 and died in 2026, the five-year period was satisfied long ago, and your distributions of earnings are tax-free. If instead the owner opened their first Roth in 2024 and died in 2026, the account is not yet five years old, and earnings withdrawn before the five-year mark can be taxable.

Ordering rules when the Roth is not yet five years old

If you inherit a Roth that has not met the five-year test, the IRS ordering rules determine what comes out first, and they work in the beneficiary’s favor:

1. Contributions the owner made come out first, always tax-free and penalty-free.
2. Converted amounts come out next, also tax-free to a beneficiary.
3. Earnings come out last, and only these are potentially taxable, and only if the five-year holding period has not been met (Source: IRS Publication 590-B, 2025).

In practice this means even a “young” inherited Roth often produces little or no taxable income for a beneficiary, because withdrawals reach the earnings layer only after the contribution and conversion layers are exhausted.

How the rule changes by beneficiary type

The IRS sorts beneficiaries into groups, and the group you fall into controls your options.

Eligible designated beneficiaries (the five who can still stretch)

Eligible designated beneficiaries (EDBs) are exempt from the 10-year rule and may take distributions over their own life expectancy instead. There are five categories (Source: IRS Publication 590-B, 2025):

Source: IRS Publication 590-B (2025) and IRS Retirement topics – Beneficiary, irs.gov.

A minor child benefits from EDB status only until reaching the age of majority; the account then switches to the 10-year rule for the remaining years. The age of majority is set uniformly under the IRS final regulations, and confirming the exact cutoff for a given situation against the current Publication 590-B is worthwhile before acting.

Non-spouse designated beneficiaries

Most adult children, grandchildren, and other individuals who are more than 10 years younger than the owner and do not otherwise qualify as EDBs are ordinary designated beneficiaries. They are the primary audience for the 10-year rule: no annual RMDs on an inherited Roth in years 1 through 9, and full distribution by December 31 of year 10.

Estates, trusts, and charities

When a Roth IRA passes to a non-individual, such as an estate, many types of trust, or a charity, the beneficiary is generally not a “designated beneficiary” and can face a shorter distribution window. Trust rules in particular are technical, and whether a trust qualifies to look through to its individual beneficiaries depends on the trust’s terms. These situations usually warrant professional review.

Can a surviving spouse avoid the 10-year rule?

A surviving spouse typically chooses among these paths:

1. Treat the Roth IRA as their own (or roll it into their own Roth IRA). The account is then treated as if the spouse had always owned it, with no lifetime RMDs and no 10-year deadline.
2. Remain a beneficiary under the inherited-IRA rules, which can make sense for a younger spouse who may want penalty-free access before age 59½.
3. Disclaim some or all of the account so it passes to the contingent beneficiary, a decision that is irrevocable and time-sensitive.

Because treating the account as one’s own generally lets the money keep growing tax-free with no forced withdrawal date, many surviving spouses find this the simplest path, though the right choice depends on age, cash needs, and other circumstances.

What happens if you miss the 10-year deadline?

The excise tax was historically 50% of the shortfall. SECURE 2.0 lowered it to 25%, and to 10% if the failure is corrected within the two-year correction window (Source: IRS Instructions for Form 5329, 2025). For an inherited Roth specifically, the practical risk is missing the single year-10 deadline rather than a series of annual RMDs, because no annual RMDs are owed in years 1 through 9.

As background, the IRS waived the excise tax for certain missed beneficiary RMDs for 2021 through 2024 while the final regulations were being settled, in a series of notices covering those years (Source: IRS Notices 2022-53, 2023-54, and 2024-35, irs.gov). That relief mattered mainly for inherited traditional IRAs; it has limited effect on inherited Roth IRAs, which owe no annual RMDs during the window in the first place.

Withdrawal strategy: is it smart to wait until year 10?

With a traditional inherited IRA, spreading withdrawals across the decade is often about smoothing taxable income. With a Roth, that pressure largely disappears, because qualified distributions are not taxable. The main variable becomes how long the balance stays invested inside the tax-free wrapper.

A hypothetical illustration of the compounding window

The following is a hypothetical illustration, not a projection, not a real client, and not a promise of results. It uses a single assumed growth rate only to show how the mechanics work.

Assume a beneficiary inherits a $200,000 Roth IRA that has already met the five-year holding period, and assume a hypothetical 6% annual growth rate held constant for simplicity. If the account were left invested and withdrawn only at the year-10 deadline, its illustrative balance at that point would be roughly $358,000 under those assumptions, all of it distributable income-tax-free. If instead the account were fully withdrawn in year one, roughly $158,000 of potential tax-free growth in this illustration would occur outside the account rather than inside it, where future earnings could then be taxable in an ordinary brokerage account.

The takeaway is not a specific number, since actual returns vary and can be negative. The point is structural: the tax-free wrapper only does its work while the money remains inside it. Whether waiting fits any individual situation depends on cash needs, other income, and estate goals, which is why this is educational rather than a recommendation.

If your broader plan also involves converting pre-tax dollars during your lifetime, our explainers on how much to convert to Roth and the Roth conversion deadline cover the timing questions those decisions raise. Large distributions can also interact with other thresholds, such as the ones behind Medicare IRMAA brackets, though qualified Roth distributions themselves are generally not counted as income for those tests.

Successor beneficiaries: what happens when you die?

The general principle is that a successor beneficiary steps into the schedule that was already running rather than starting a fresh 10-year period. Exactly how the remaining window is measured can depend on whether the person you inherited from was an eligible designated beneficiary using a life-expectancy stretch or an ordinary designated beneficiary already inside a 10-year window. Because the mechanics vary by situation, this is one area where reviewing the current Publication 590-B or consulting a professional is particularly useful.

Does the 10-year rule work differently for an inherited Roth 401(k)?

Roth 401(k) accounts moved closer to Roth IRA treatment when lifetime RMDs for Roth 401(k) owners were eliminated beginning in 2024. That change reinforces the idea that a Roth workplace-plan owner is treated as dying before a required beginning date. Even so, employer plans carry their own distribution provisions, and a beneficiary’s options can be narrower inside a plan than in an IRA. Where the plan allows, moving the inherited balance into an inherited Roth IRA can provide more flexibility, subject to the same overall deadline.

Frequently asked questions

Do I have to take RMDs from an inherited Roth IRA each year?

No. An inherited Roth IRA subject to the 10-year rule requires no annual required minimum distributions in years 1 through 9. Because a Roth owner has no required beginning date, the account only has to be fully emptied by December 31 of the tenth year after the owner’s death (Source: IRS Publication 590-B, 2025).

Are withdrawals from an inherited Roth IRA tax-free?

Generally yes, once the account has met a five-year holding period. Qualified distributions from an inherited Roth IRA are income-tax-free. If the account is less than five years old, the earnings portion can be taxable, but contributions and converted amounts still come out tax-free under the ordering rules (Source: IRS Publication 590-B, 2025).

What is the 5-year rule for an inherited Roth IRA?

The five-year rule sets when Roth earnings become tax-free. The clock carries over from the original owner and counts from January 1 of the year that owner first funded any Roth IRA. Once five years have passed, qualified distributions of earnings are tax-free; before then, earnings can be taxable (Source: IRS Publication 590-B, 2025).

Can a surviving spouse avoid the 10-year rule?

Often yes. A surviving spouse is an eligible designated beneficiary and may treat the inherited Roth as their own, roll it over, keep it as an inherited IRA, or disclaim it. Treating it as their own removes the 10-year deadline entirely, since a Roth owner takes no lifetime RMDs (Source: IRS Publication 590-B, 2025).

What happens if I don’t empty the account by year 10?

The IRS imposes an excise tax on the amount that should have been distributed. Under SECURE 2.0, the penalty is 25% of the shortfall for tax years beginning after December 29, 2022, reduced to 10% if corrected within a two-year window. It is reported and any waiver requested on Form 5329 (Source: IRS Instructions for Form 5329, 2025).

Who is exempt from the 10-year rule?

Eligible designated beneficiaries can still stretch distributions over their life expectancy instead of following the 10-year rule. The five categories are a surviving spouse, the owner’s minor child, a disabled individual, a chronically ill individual, and an individual not more than 10 years younger than the owner (Source: IRS Publication 590-B, 2025).

Can I let the inherited Roth keep growing for the full 10 years?

Yes. Because no annual RMDs are required, a beneficiary may leave the account invested and withdraw only at the year-10 deadline. Since qualified Roth distributions are income-tax-free, any growth during the window stays tax-sheltered until the account must be emptied. Whether waiting fits your situation depends on personal circumstances (Source: IRS Publication 590-B, 2025).

What happens to the account when the beneficiary dies?

Your own beneficiary becomes a successor beneficiary. The existing distribution clock generally continues rather than resetting to a fresh 10 years, so the successor typically must finish distributions within the timeframe already running. Successor rules are technical, so confirming the specific timeline with current IRS guidance is advisable (Source: IRS Publication 590-B, 2025).

Sources