What is the best thing to do with an inherited Roth IRA?

Assuming you don't need the money right away, the best thing to do with an inherited IRA is often to allow the money to grow tax-free for as long as possible. If you inherited a Roth IRA from someone other than your spouse, you typically have 10 years following the original owner's death to deplete the account.

Do beneficiaries pay taxes on a Roth IRA inheritance?

Usually, no. Withdrawals of both contributions and earnings from an inherited Roth IRA are generally tax-free as long as the account is at least five years old.

Does the 10-year rule apply to inherited IRAs?

Yes, the 10-year rule applies to most inherited IRAs if they're inherited from a non-spouse and the original owner died after 2019. (Exceptions apply if you're an eligible designated beneficiary.) If the 10-year rule applies, you'll need to withdraw all account funds within 10 years of the original owner's death.

Is it better to inherit a Roth IRA or traditional IRA?

It's generally better to inherit a Roth IRA instead of a traditional IRA because a Roth IRA offers tax-free withdrawals if the account is at least five years old.

Inherited a Roth IRA? Here's What You Need to Know About Rules, Taxes, and Beneficiaries

The rules for taxes and beneficiaries you need to know.

By Robin Hartill, CFP – Updated Dec 31, 2025 at 1:58 PM EST

Key Points

Inherited Roth IRAs bypass probate and go directly to the person listed as the beneficiary.
Roth IRA distribution rules differ for spouses vs. non-spouses.
Most non-spouse beneficiaries need to withdraw all Roth IRA assets within 10 years of the original owner's death.

You can inherit a Roth individual retirement account (IRA) and avoid a lengthy court process known as probate as long as the person who died listed you as a beneficiary. The distribution rules for beneficiaries can get complicated and depend on two key factors:

Your relationship to the original account owner: The IRS lets you treat a Roth IRA from a spouse as if the funds were always yours. For non-spouses, different rules apply.
When the original account owner died: The SECURE Act, which went into effect in 2020, changed the inherited IRA rules. If your loved one died before Dec. 31, 2019, then the old rules apply.

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Probate

Probate is a court-supervised process of administering a deceased person's estate. Learn about how probate works and how to avoid it.

An infographic outlining the four criteria to qualify as an eligible designated beneficiary for an inherited Roth IRA. — Image source: The Motley Fool

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The new law prevents you from stretching out the distributions over your lifetime, which enables you to maximize the account's tax-free growth. However, the new law also creates a category of beneficiaries called "eligible designated beneficiaries" who are still allowed to stretch distributions over their life expectancies. You qualify as an eligible designated beneficiary if:

You're inheriting the Roth IRA from your spouse. If you are the account's sole beneficiary, you can treat the account as you would your own. You do not have RMDs. However, if you open the Roth IRA as a new inherited account, you need to take RMDs but can stretch them over your lifetime.
You're the minor child of the original owner. You can take distributions based on your life expectancy until you're 18 or the age of majority, if different, in your state. Then you have 10 years to deplete the remainder of the account. If you're enrolled in school, you can typically delay starting the 10-year withdrawal period until age 26.
You're chronically ill or disabled.
The original Roth IRA owner was less than 10 years older than you.

Under the old rules, which apply if your loved one passed away in 2019 or earlier, you have to take RMDs when you inherit a Roth IRA from someone who wasn't your spouse. You can stretch distributions over your lifetime using an IRS life expectancy table to estimate your remaining lifespan based on your age.

For example, someone who is 40 years old could expect to live another 45.7 years, according to IRS tables. So a 40-year-old with a $1 million Roth IRA inherited from someone who died pre-2020 would have an RMD of $21,881, which is equal to $1 million divided by 45.7.

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About the Author

Robin Hartill, CFP, is a contributing writer at The Motley Fool. Robin’s work has also been published by Yahoo Finance, USA Today, and Penny Hoarder. She is a graduate of the University of Florida.

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The Motley Fool has a disclosure policy.

Inheriting a Roth IRA from a parent

A Roth IRA inherited from a parent is treated the same as a Roth IRA inherited from any other non-spouse. Your options are relatively limited because you aren't allowed to treat the account as if it were originally your own.

If you inherit a Roth IRA from a parent or non-spouse who died in 2020 or later, you can:

Open an inherited IRA and withdraw all the funds within 10 years. You do not have RMDs, but the maximum allowed distribution period is 10 years.

Open an inherited IRA and stretch RMDs over your lifetime. This is provided that you qualify as an eligible designated beneficiary.

If you inherited a Roth IRA from a parent or non-spouse who died in 2019 or earlier, you can:

Open an inherited IRA and take RMDs. You can stretch the RMDs over your lifetime, which is a good way to maximize the money's tax-free growth.

Open an inherited IRA and withdraw the funds within five years. RMDs aren't required if you withdraw all the money within five years.

Regardless of when your loved one died, you have the option of taking a lump-sum distribution. You do not pay income tax or a penalty regardless of your age provided the IRA has been open for at least five years.

What should you do if you've inherited a Roth IRA?

Inheriting a Roth IRA and leaving assets in the account as long as you can has the major advantage of allowing the assets to continue to grow tax-free. Gains held in an IRA are not taxed no matter how much the account increases, which is one of the biggest advantages of Roth IRAs.

It's essential that you understand and follow all the rules, though. If you fail to annually take enough money out of the account as the IRS requires, you could pay a penalty equivalent to 50% of the amount you should have withdrawn for the year.

Before you make any big decisions about your inherited Roth IRA, consider consulting with a tax advisor to make sure you comply with all the rules and maximize the growth of the money you've received.

Inherited a Roth IRA? Here's What to Do Now

The rules for taxes and beneficiaries you need to know.

Key Points

Probate

Roth IRA vs. Traditional IRA

Full Retirement Age for Getting Social Security

401(k) to Roth IRA Conversion

Everything You Need to Know About Social Security Benefits in 2026

Inherited Roth IRA FAQ

About the Author

Our Guides

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Roth IRA vs. Traditional IRA

Full Retirement Age for Getting Social Security

401(k) to Roth IRA Conversion

Everything You Need to Know About Social Security Benefits in 2026

Inherited Roth IRA FAQ

What is the best thing to do with an inherited Roth IRA?

Do beneficiaries pay taxes on a Roth IRA inheritance?

Does the 10-year rule apply to inherited IRAs?

Is it better to inherit a Roth IRA or traditional IRA?

Inherited Roth IRA distribution rules

Inheriting a Roth IRA from a spouse

Inheriting a Roth IRA from a parent

What should you do if you've inherited a Roth IRA?

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