Roth IRAs have no required minimum distributions during your lifetime

A Roth IRA does not require you to take money out at any age while you are alive. This is one of the largest differences between a Roth IRA and a traditional IRA. With a traditional IRA, you must start taking withdrawals at age 73 (as of 2023, though this age changes under current law). With a Roth, you can leave the money untouched for as long as you want, even past age 100.

This rule applies only to the account holder — the person whose name is on the Roth IRA. If you inherit a Roth IRA from someone else, different rules apply to you as the beneficiary, and those rules changed significantly in 2023.

The no-withdrawal requirement is one reason people use Roth IRAs as part of estate planning. You can let the account grow tax-free for decades and pass it to heirs without being forced to drain it yourself.

Key Takeaways

  • You never have to withdraw money from your own Roth IRA during your lifetime, no matter how old you are.
  • Traditional IRAs require withdrawals starting at age 73, but Roth IRAs do not.
  • If you inherit a Roth IRA, you must withdraw the money within 10 years under rules that took effect in 2023.
  • You can still withdraw your own contributions to a Roth IRA at any time without penalty, even if you do not have to.

What happens to a Roth IRA after you die

When you pass away, your Roth IRA goes to whoever you named as a beneficiary on the account. That person — or those people — then becomes responsible for the money. The beneficiary does not have the same freedom you had.

Starting in 2023, most beneficiaries must withdraw all the money from an inherited Roth IRA within 10 years. This is called the 10-year rule. They can take the money out in any pattern they want — all at once, in chunks, or spread across the 10 years — but the account must be empty by the end of year 10. The exact deadline is December 31 of the year that is 10 years after the original account holder died.

There are exceptions to the 10-year rule. A surviving spouse can treat the inherited Roth as their own, which means they go back to having no withdrawal requirement. Children, parents, and other relatives do not have this option and must follow the 10-year timeline.

Why Roth IRAs have no required minimum distributions

The reason Roth IRAs have no withdrawal requirement is tax-related. Money in a Roth IRA grows tax-free, and withdrawals are tax-free if you follow the rules. The government does not need you to take the money out because it has already collected taxes on the money you put in.

With a traditional IRA, the opposite is true. You get a tax deduction when you contribute, so the government has not yet taxed that money. Required minimum distributions force you to take money out and pay income tax on it, which is how the government eventually collects what it is owed.

Because a Roth has already been taxed at the source, there is no tax collection deadline. The account can sit and grow indefinitely.

You can still withdraw from your Roth IRA whenever you want

Having no required withdrawal does not mean you cannot take money out. You can withdraw your contributions — the money you actually deposited — at any time, for any reason, with no penalty and no taxes owed. This is true even if you are under age 59½, which is normally the earliest age for penalty-free withdrawals.

Withdrawing the earnings (the investment gains) before age 59½ is more complicated. You can do it without penalty if you meet one of several exceptions, such as a first-time home purchase, disability, or medical expenses. If you do not meet an exception, you pay income tax on the earnings plus a 10% penalty.

The point is that the lack of a required withdrawal does not lock your money away. It simply means you are not forced to take it out.

How the 10-year rule works for inherited Roths

If you inherit a Roth IRA from someone who was not your spouse, you have 10 years to empty it. The account must be fully withdrawn by December 31 of the year that marks 10 years after the original owner's death. You do not have to take equal amounts each year or follow any particular schedule — you just have to reach zero by the deadline.

One common mistake is thinking you have to take withdrawals every year. You do not. You could take nothing for 9 years and then withdraw everything in year 10. However, if you miss the final deadline, any money still in the account is subject to a 25% penalty (reduced to 10% if you correct it within two years).

The money you withdraw from an inherited Roth is tax-free if the original owner had the account for at least five years. If the account was newer than that, the earnings portion of your withdrawal is taxable income, though the contributions remain tax-free.

Spousal beneficiaries have different options

If your spouse inherits your Roth IRA, they can treat it as their own. This means they step back into your shoes: no required withdrawals, the ability to add new contributions, and all the other rules that apply to a regular Roth owner. This is usually the best option for a surviving spouse.

Alternatively, a spouse can keep the inherited Roth in your name and follow the 10-year rule instead. This might make sense in specific tax situations, but most people choose to treat it as their own.

A spouse is the only type of beneficiary with this choice. Adult children, parents, and other relatives must use the 10-year rule.

Frequently Asked Questions

What if I turn 73 and still have money in my Roth IRA?

You do not have to take it out. Age 73 is when traditional IRA owners must start withdrawals, but Roth IRAs have no age-based requirement. You can leave the money there as long as you want.

Can I avoid the 10-year rule by naming my spouse as beneficiary?

Your spouse can avoid the 10-year rule by treating the inherited Roth as their own, which puts them back in the position of having no required withdrawals. Other beneficiaries cannot avoid the 10-year deadline.

Do I have to withdraw money from my Roth every year to keep it active?

No. You can leave a Roth IRA untouched for years and it remains active. There is no minimum activity requirement. The account will continue to grow tax-free as long as you own it.

What happens if my inherited Roth beneficiary misses the 10-year deadline?

Any money still in the account after December 31 of year 10 is subject to a 25% penalty. The penalty can be reduced to 10% if the mistake is corrected within two years. The money is also subject to income tax.