How Must I Take Distributions From The Roth IRA I Inherited?

Navigating the complexities of inherited Roth IRAs can be challenging for both advisors and clients. Roth IRAs don’t follow the same rules as Traditional IRAs when it comes to required minimum distributions (RMDs), particularly during the original owner’s lifetime. However, RMDs do become a concern when Roth IRAs are inherited. With recent changes brought about by the SECURE Act, financial advisors need to stay on top of the new rules surrounding inherited Roth IRAs.

We’ve developed a guide to help financial advisors clarify these rules. This flowchart covers important factors a client needs to consider when determining how they must handle distributions from their inherited Roth IRA, such as:

• Determining whether the client is an Eligible Designated Beneficiary or Non-Eligible Designated Beneficiary, and how that will affect their distribution requirements.
• Who the 10-Year Rule does and does not apply to.
• Whether required minimum distributions (RMDs) apply, and whose life expectancy they are based on.