Non-Spousal Inheritance of a Roth Account
The beneficiary of my Roth account is my daughter. I am 78 years old and have had the Roth account for over 15 years. I am confused on whether my daughter will have to remove an actuarial percent in years 1-9 after my death and then the the full remaining balance in the 10th year after my death. I realize it needs withdrawing by the 10th year but I did not believe anything had to be removed in years 1-9. Please explain. Thank you.
Permalink Submitted by Alan - IRA critic on Sun, 2023-01-15 23:00
You are correct. All Roth owners pass prior to RBD because there is no RBD for a Roth IRA. Because of that your beneficiary will not have to take annual RMDs in years 1-9, but must drain the inherited Roth in year 10. Since that distribution will be tax free, the longer she goes without taking distributions the more tax free gains could be generated.