Inherited Roth IRA requirements
Could you please clarify:
I believe, if a designated beneficiary inherits a Roth IRA, the 10 year rule applies, so distributions are optional for years one through nine and the account must be fully distributed no later than year 10.
HOWEVER in very black and white terms,
Per Fidelity’s website at the following link, it state “IF YOU INHERITED A ROTH IRA….YOU MUST TAKE RMDS”:
https://www.fidelity.com/building-savings/learn-about-iras/inherited-ira-rmd
Per Vanguard’s website at the following link, it states “BENEFICIARES WHO INHERIT ROTH IRAS MUST TAKE RMDS”:
https://investor.vanguard.com/inheriting-accounts/rmd-rules-for-inherited-iras
In more “grey terms,
Per the IRS website at the following link, it states first “inherited Roth IRA accounts are subject t the same RMD requirements as inherited traditional IRAs”. On its own, that statement could be interpreted a few ways, but the IRS website follows up in the next paragraph stating “Distributions from another Roth IRA cannot be substituted for these distributions unless the other Roth IRA was inherited from the same decedent”. To me this would imply that RMDs must be taken and cannot be substituted for withdrawals from Roth accounts unless they are from the same decedent.
https://www.irs.gov/retirement-plans/plan-participant-employee/retirement-topics-beneficiary
Could you please clarify if RMDs are required on inherited Roth IRAs for years one to nine?
Thank you so much!!
Permalink Submitted by David Mertz on Fri, 2023-12-01 21:22