Inherited Roth IRA Rules: The 10-Year Rule, Tax-Free Distributions, and the Optimal Strategy

Yes, the 10-year rule applies — but inherited Roth IRAs come with an advantage most beneficiaries don't realize they have.

Does the 10-year rule apply to inherited Roth IRAs?

Yes. The SECURE Act of 2019 eliminated the stretch IRA for most non-spouse beneficiaries, and the change applies to both traditional and Roth IRAs.¹ If you inherited a Roth IRA (or Roth 401(k)) from someone who died after December 31, 2019, and you are not an Eligible Designated Beneficiary, you must fully deplete the account by December 31 of the 10th year after the original owner's death.

The depletion deadline works the same way as for inherited traditional IRAs:

The big difference: no annual RMDs

This is the critical distinction between inheriting a traditional IRA and a Roth IRA. For inherited traditional IRAs, the 2024 IRS final regulations (T.D. 10001) established that if the original owner had already passed their Required Beginning Date (RBD), non-EDB beneficiaries must take annual RMDs in each of years 1 through 9.²

For inherited Roth IRAs, that rule does not apply — regardless of the original owner's age at death. The reason: Roth IRA owners were never subject to lifetime RMDs. Because there is no RBD for Roth IRAs, the IRS treats all Roth IRA owners as having died before their Required Beginning Date. This means the post-RBD annual RMD rule cannot be triggered for an inherited Roth IRA.

Practical result: You can withdraw zero from an inherited Roth IRA in years 1 through 9 — and simply distribute the full balance in year 10. Or distribute whenever convenient. The timing is entirely up to you, as long as the balance reaches zero by the end of year 10.

Are distributions really income-tax-free?

Usually yes — but the answer depends on the original owner's 5-year rule, not yours.

The 5-year rule for inherited Roth IRAs

For Roth IRA distributions to be "qualified" (and therefore income-tax-free), the Roth IRA must have been open for at least 5 years, measured from January 1 of the year the original owner made their first Roth IRA contribution.³ When you inherit a Roth IRA, you inherit the original owner's 5-year clock — you do not start a new one.

Contributions to the Roth IRA are always distributed tax-free, regardless of the 5-year rule — because they were made with after-tax dollars. Only the earnings (growth) are subject to the 5-year rule. In most real-world cases — a parent who opened their Roth IRA years or decades before dying — the 5-year rule is long since satisfied and all distributions are fully tax-free.

If the 5-year rule is not yet met at the time you take a distribution, the earnings portion of the distribution will be included in your ordinary income. The good news: the 10-year window for most beneficiaries provides time for the clock to complete before you take meaningful distributions.

What this means in real dollars

A 47-year-old inherits a $500,000 Roth IRA in 2025 from a parent who opened their first Roth IRA in 2008 and died in 2025. The original owner's 5-year rule was satisfied in 2013.

• No annual RMDs required in 2026–2034
• At 7% average annual growth, $500,000 grows to approximately $916,000 by December 31, 2035
• The full $916,000 distribution in year 10 is income-tax-free
• Equivalent inherited traditional IRA at the same 7% growth: a year-10 lump-sum distribution would add ~$916,000 to ordinary income — potentially $330,000+ in additional federal taxes at top rates

The absence of annual RMDs and the tax-free treatment of distributions make the inherited Roth IRA a fundamentally different planning situation than the inherited traditional IRA.

Who is exempt: Eligible Designated Beneficiaries

The same five EDB categories that apply to inherited traditional IRAs also apply to inherited Roth IRAs.¹ EDBs are not subject to the 10-year rule and retain the lifetime stretch option:

1. Surviving spouse — may roll the Roth IRA into their own Roth IRA (see below) or keep it as an inherited Roth IRA and stretch distributions over their own life expectancy.
2. Minor child of the decedent — stretch applies until reaching the age of majority, then a 10-year clock begins.
3. Disabled individual — as defined under IRC § 72(m)(7).
4. Chronically ill individual — as defined under IRC § 7702B(c)(2).
5. Beneficiary not more than 10 years younger than the decedent — covers siblings close in age and similar near-peer relationships.

Surviving spouse options for inherited Roth IRAs

A surviving spouse who inherits a Roth IRA has an option unavailable to any other beneficiary: rolling the inherited Roth IRA directly into their own Roth IRA. This eliminates the 10-year rule entirely — the assets are now part of the surviving spouse's own Roth IRA, which has no lifetime RMD requirement and no 10-year depletion deadline.

The 5-year rule after a spousal rollover takes the later of:

• The original owner's existing 5-year clock (inherited), or
• The surviving spouse's own existing Roth IRA 5-year clock

In most cases, both clocks will already be satisfied. The practical outcome: tax-free, unlimited deferral of the inherited assets within the surviving spouse's own Roth IRA — one of the most valuable elections in estate planning.

If the surviving spouse is under 59½ and needs access to the funds before that age, keeping the account as an inherited Roth IRA (rather than rolling over) can be advantageous: distributions from an inherited IRA are exempt from the 10% early-withdrawal penalty, while distributions from a rollover Roth IRA before age 59½ may trigger it. See the Spousal Rollover vs. Inherited IRA guide for the full decision framework.

The optimal distribution strategy for inherited Roth IRAs

For most non-spouse beneficiaries of an inherited Roth IRA where the original owner's 5-year rule is already met, the optimal strategy is simple: take nothing until year 10. Let the full account compound tax-free for the maximum time, then take a single lump-sum distribution at the end of year 10.

This works because:

• There is no annual RMD requirement — no forced distributions in years 1–9
• Distributions are tax-free — there is no bracket-management calculation to do (unlike inherited traditional IRAs where spreading withdrawals over the window minimizes taxes)
• Deferral maximizes the tax-free compounding period

The exception: if you need the funds before year 10 — to buy a home, pay for education, cover an expense — take them when you need them. Distributions from an inherited Roth IRA are tax-free once the 5-year rule is met, so there is no tax penalty for early distributions (no 10% early-withdrawal penalty applies to inherited IRAs).

Inherited Roth 401(k): similar but not identical

Non-spouse beneficiaries of inherited Roth 401(k)s (and Roth 403(b)s and Roth TSP accounts) are subject to the same 10-year depletion rule. SECURE 2.0 eliminated lifetime RMD requirements for Roth designated accounts starting in 2024,⁴ which means for owners who died in 2024 or later, the same "no annual RMDs" logic applies as for inherited Roth IRAs.

One additional option worth noting: most plan documents allow non-spouse beneficiaries to roll inherited Roth 401(k) assets into an inherited Roth IRA. This preserves the tax-free treatment and the flexible distribution timing of the IRA structure. If the plan requires rapid distribution (some employers mandate it for non-spousal beneficiaries), a rollover to an inherited Roth IRA can extend the distribution window to the full 10 years. Confirm plan-specific rules with the plan administrator.

When an inherited Roth IRA could become taxable

Two scenarios where an inherited Roth IRA distribution might not be fully tax-free:

1. The 5-year clock isn't satisfied yet. If the original owner opened their first Roth IRA recently (within the last 5 years), earnings distributed before the clock completes are ordinary income. Contributions are still tax-free.
2. You miss the 10-year deadline. If any balance remains in the account after December 31 of year 10, it must be distributed by year-end — and while the distribution itself is still income-tax-free (if the 5-year rule is met), failing to take the distribution triggers a 25% excise tax on the undistributed amount. Set a calendar reminder well before the deadline.

Sources

1. IRC § 401(a)(9)(H) — SECURE Act 10-year rule for post-2019 deaths; § 401(a)(9)(E)(ii) — Eligible Designated Beneficiary categories. The 10-year rule applies to inherited traditional IRAs, Roth IRAs, and inherited qualified plan accounts (including Roth 401(k)s). Enacted as part of P.L. 116-94 (SECURE Act of 2019).
2. T.D. 10001 — Final Regulations on Required Minimum Distributions (July 2024). Confirmed annual RMD requirement in years 1–9 for non-EDBs when the traditional IRA decedent died after their Required Beginning Date. Roth IRA owners have no RBD, so the annual RMD rule does not apply to inherited Roth IRAs.
3. IRS Publication 590-B — Distributions from Individual Retirement Arrangements. 5-year rule for qualified Roth IRA distributions: clock begins January 1 of the year of the owner's first Roth IRA contribution; beneficiaries inherit the original owner's clock, not their own.
4. IRS RMD FAQs — SECURE 2.0 Act Changes. SECURE 2.0 § 325: eliminated lifetime RMD requirements for Roth designated accounts (Roth 401(k), Roth 403(b), Roth TSP) effective January 1, 2024.

Tax laws and IRS regulations verified as of April 2026. Roth IRA inheritance rules interact with your own retirement accounts, tax situation, and estate planning — confirm your specific situation with a qualified advisor before acting.