Can inherited Roth IRA still be stretched under SECURE Act?
One thing I have not been able to find anywhere is whether inherited Roth IRAs will need to be liquidated in 10 years or not. I know there is no tax due but will those still be able to be stretched or does the government want to force that money out of a tax favored account in 10 years hoping they will be able to generate tax revenue from wherever it goes.
Permalink Submitted by Alan - IRA critic on Mon, 2020-01-06 17:25
The latter. The Secure Act treats inherited Roth IRAs just like other inherited accounts with respect to the time limit for RMDs, either 10 years for most beneficiaries or life expectancy for eligible beneficiaries. However, since an inherited Roth is typically non taxable, the 10 year beneficiary will benefit by waiting to the end of that period to take any distributions since there are no annual RMDs for 10 year beneficiaries, and waiting allows the Roth to continue generating tax free gains.
Permalink Submitted by David Henderson on Mon, 2020-01-06 19:43
Thank you!