SECURE Act Mandates 10-Year Roth IRA Withdrawal Deadline

The Internal Revenue Service requires most nonspouse beneficiaries who inherit a Roth IRA to withdraw the full account balance by the end of the 10th year following the original owner's death. This mandate, established under the SECURE Act and IRS Publication 590-B, generally imposes no annual withdrawal requirements during the first nine years, allowing assets to grow tax-free until the final deadline.

Financial projections show that early withdrawals reduce potential gains. An inheritance of $250,000 growing at a 5% annual return would reach approximately $407,224 over ten years, yielding $157,224 in tax-free growth. Distributions remain tax-free as long as the original owner satisfied the five-taxable-year requirement.

Failure to empty the account by the December 31 deadline of the 10th year results in an excise tax penalty, which some guidance identifies as 25%. These rules follow final regulations published by the United States Department of the Treasury on July 19, 2024, under section 401(a)(9).