Inherited Roth IRA 10-Year Rule Calculator
Plan how to drain an inherited Roth IRA over the SECURE Act's mandatory 10-year window. Unlike inherited Traditional IRAs, distributions are tax-free — so the optimal strategy is to wait until year 10, let the entire balance grow, and lump-sum withdraw. This calculator compares lump-sum-year-10 against early-equal-withdrawal strategies.
The SECURE Act 10-Year Rule for Inherited Roth IRAs
The SECURE Act of 2019 (effective January 1, 2020) eliminated the "stretch IRA" for most non-spouse beneficiaries. If you inherit a Roth IRA from someone who died on or after January 1, 2020, and you are not an Eligible Designated Beneficiary (EDB), the entire inherited Roth IRA must be emptied by December 31 of the 10th year following the year of death. The good news: there are no annual required minimum distributions (RMDs) during years 1-9 (per IRS Notice 2024-35 final regulations), and all withdrawals from a Roth IRA are tax-free if the original Roth was at least 5 years old at death (which it almost always is). This makes inherited Roths uniquely valuable: you control timing, the money grows tax-free for up to 10 years, and the lump sum is fully tax-free. Per IRS RMD final regulations, the 10-year clock starts the year after death — for example, a 2026 death triggers a December 31, 2036 emptying deadline. Last updated May 2026.
Why Lump-Sum at Year 10 Beats Equal Withdrawals
Because Roth distributions are tax-free regardless of when taken, the optimal strategy for non-spouse beneficiaries is maximum delay — let the entire balance compound tax-free for 10 years, then withdraw the lump sum in year 10. Math example: a $500,000 inherited Roth growing at 7% annually becomes $983,576 by year 10 if untouched. If you withdrew $50,000/year (equal 1/10 strategy), the year-10 balance plus prior withdrawals totals only $760,000 — a $223,000 difference. The lump-sum strategy captures the full power of compound growth on the entire balance. Exception: if you have a spike-year of unusually high income, take more from the Roth in low-income years (still tax-free) to protect the year-10 lump sum from accidentally pushing you into a higher Medicare IRMAA bracket the year of withdrawal.
Inherited Roth IRA vs Inherited Traditional IRA — Big Difference
Both inherit a 10-year drain rule under SECURE, but the tax treatment differs sharply. Traditional IRA: every dollar withdrawn is taxed as ordinary income at your marginal bracket. Beneficiaries in the 24-32% bracket commonly lose $120K-$240K in federal tax on a $500K inheritance, plus state tax. The math forces equal-spread withdrawals (front-load + back-load) to manage bracket creep. Roth IRA: zero federal income tax on any withdrawal as long as the Roth was 5+ years old. No bracket-management problem, no MAGI/IRMAA bumps, no NIIT. The only Roth-specific trap is the 5-year rule on conversions inside the inherited Roth — if the decedent did Roth conversions in the 5 years before death, the converted-portion 5-year clock continues for the beneficiary. Per IRS Publication 590-B, basis tracking matters even on inherited Roths.
Spouse Beneficiaries Have Better Options
If you inherit a Roth IRA from your spouse, you have three options: (1) Treat as own: roll it into your existing Roth IRA — no 10-year deadline, no RMDs ever during your lifetime, full Roth flexibility. (2) Inherited Roth IRA in your name: 10-year rule applies but penalty-free withdrawal at any age. (3) Disclaim: pass it to contingent beneficiaries within 9 months of death. Option 1 is almost always best for surviving spouses unless you're under 59½ and need access to the funds without the 10-year deadline. Per IRS inherited IRA guidance, the spouse election to "treat as own" must be made by year-end of the year following death, with the IRA retitled in the spouse's name.
Frequently Asked Questions
Does the 10-year rule apply to all inherited Roth IRAs?
Yes for all non-spouse non-EDB beneficiaries who inherited from someone who died on or after January 1, 2020. Spouse beneficiaries can elect to "treat as own" and skip the 10-year rule. EDBs (chronically ill, disabled, minor children of decedent, beneficiaries within 10 years of decedent's age) can take life-expectancy distributions instead.
Are inherited Roth IRA distributions taxable?
No, distributions of contributions and conversions older than 5 years are completely tax-free. Distributions of growth are tax-free if the original Roth IRA was opened more than 5 years before the original owner's death. The 5-year clock carries over to the beneficiary; it does not restart.
Can I extend the 10-year deadline?
No. Unlike RMD rules that allow re-do or correction, the 10-year deadline is hard. Funds remaining on December 31 of year 10 trigger a 25% excise tax on the undistributed amount (reduced from 50% by SECURE 2.0). The IRS may waive the penalty if missed for "reasonable cause" — file Form 5329 with explanation.
Should I convert the inherited IRA into my own Roth?
You cannot. Roth IRA contributions can only come from earned income or your own existing IRAs. An inherited Roth IRA must remain titled as inherited (e.g., "Jane Doe IRA, inherited from John Doe") and cannot be commingled with your personal Roth IRA except for spouse beneficiaries.
What happens if I take the lump sum in year 10?
Tax-free, no penalty, no income tax owed. The lump sum does not count as taxable income, so it does not affect your tax bracket, Medicare IRMAA, ACA subsidy, or Social Security taxation. This is the unique advantage of inherited Roth vs inherited Traditional.
Who is an Eligible Designated Beneficiary (EDB)?
Five categories: (1) surviving spouse, (2) minor child of decedent (under 21), (3) chronically ill individual, (4) disabled individual, (5) any beneficiary within 10 years of the decedent's age. EDBs use the life-expectancy stretch and are exempt from the 10-year rule (except for minor children, who switch to the 10-year rule at age 21).