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Thanks to the IRS’ interpretation of the SECURE Act, there’s now one more difference between traditional and Roth IRAs.

In recent regulations implementing the Act, the Internal Revenue Service said that non-eligible designated beneficiaries who inherited an IRA after the account owner had reached their required beginning date (RBD) would not only have to empty the account by the end of ten years after the account owner’s death but would also have to take required minimum distributions (RMDs) over that ten year period. Except for those who inherit Roth IRAs. Because Roth IRAs do not require account owners to take RMDs during their lifetime, beneficiaries of Roth IRAs cannot be required to take them after inheriting a Roth account. A non-eligible designated beneficiary still has ten years to empty the account.


We’d better define some of the terms we used in the preceding paragraph. Below is a list of who is considered an eligible designated beneficiary. Anyone who does not meet the descriptions below would be considered a non-eligible designated beneficiary.
• A surviving spouse. Spouses will make up the vast majority of EDBs.
• Beneficiaries no more than 10 years younger than the deceased account holder. This would cover designated beneficiaries who are parents and many beneficiaries who are siblings.
• A disabled individual. A rigorous definition of disability will be used, and the beneficiary will have to provide evidence to support their claim of disability.
• A chronically ill individual. Like disability a hard to meet definition applies and the burden of proof is on the individual who is claiming to be chronically ill.
• A child under the age of majority. Note that this applies only to children, not to grandchildren who may be designated as a beneficiary.

A required minimum distribution (RMD) is a mandatory withdrawal that must be taken once the owner of an IRA reaches the age of 72. The required beginning date (RBD) is April 1 of the year following the year in which the account holder reaches the age of 72.

If you’re going to be investing in IRAs (either traditional or Roth), it’s to your advantage to become familiar with IRA rules, or work with an advisor who is familiar with those rules. For those who are still contributing to IRAs, IRS publication 590A has all you need to know. 2021 Publication 590-A (irs.gov). Publication 590B is for those who are taking distributions (or are about to take distributions) from IRAs. 2021 Publication 590-B (irs.gov). These publications are updated each year and the ones that were available on the IRS site when this article was prepared were for 2021.

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