Required minimum distributions (RMDs)

Q&A: Does an inherited Roth IRA get a new 10-year deadline?

September 21, 2026 By Liz Weston 2 Comments

Dear Liz: I recently inherited a Roth IRA. If I understand correctly, I can leave the money in the IRA for 10 years. If I die before then and my adult son inherits the account, does he then get an additional 10 years to do something with the money?

Answer: That depends on the circumstances.

If you inherited this Roth IRA from your spouse, you can use your own life expectancy to calculate required minimum distributions, Luscombe says. If you die before emptying the account, your son typically would get 10 years from the date of your death to drain it.

The same rules apply if you are otherwise an “eligible designated beneficiary,” which includes disabled or chronically ill people and those who are not more than 10 years younger than the original Roth IRA owner.

If none of the above exceptions apply, however, you must empty an inherited Roth IRA by Dec. 31 of the 10th year following the original owner’s death. If you die before then, your son inherits your deadline along with the account. He doesn’t get a new 10-year period but must withdraw the money from the Roth by the same deadline that applied to you.

Q&A: Can investment gains outweigh inherited IRA penalties?

September 7, 2026 By Liz Weston Leave a Comment

Dear Liz: You recently answered a question from a person who inherited their father’s IRA in 2010 and learned they faced significant penalties for failing to withdraw the money over the subsequent 10 years.

But given how well the market has done over the last 16 years, is it possible they will end up with even more money despite the penalties than if they had withdrawn the funds as required?

Answer: No. The penalties are hefty enough that even a bull market shouldn’t tempt someone into ignoring them.

By the way, the original letter writer wasn’t required to drain the inherited IRA within 10 years.

That requirement for most nonspouse beneficiaries has only been in place since the SECURE Act of 2019. Before then, inheritors were typically allowed to stretch withdrawals over their own lifetimes — but they were still required to make annual withdrawals or face 50% penalties.

The SECURE Act reduced those penalties to a 25% excise tax on the amount that hadn’t been withdrawn. The penalty can be reduced to 10% if corrected within two years.

Q&A: When a new school district has a bad retirement plan

August 10, 2026 By Liz Weston

Dear Liz: I have taught for 22 years and recently accepted a position in a neighboring school district. I have a 403(b) retirement plan invested in a low-cost target date fund. The neighboring district’s vendor list does not include this option. Would it be more advantageous to leave my money in the current account or to roll it into a brokerage with a target date fund? If so, how do I choose what’s right for me?

Answer: As a teacher, you need to be aware that many districts’ 403(b) plans are scandalously bad. Instead of offering sensible, low-cost options, these subpar retirement plans are filled with high-fee annuities.

Your current plan is one of the better ones, since you have access to low-cost mutual funds. You can investigate the neighboring district’s plan at 403bwise.org, a nonprofit site dedicated to educating teachers about the issue. The site has reviews of many districts’ plans. If your new district isn’t included, the site has tips on how to get more information, evaluate your options and press for change.

If the new plan is a stinker, you can leave your money in the old plan, although you won’t be able to make new contributions. You also could consider rolling the account into an IRA at a brokerage. (Don’t move it to a regular brokerage account, as that would be considered a withdrawal that can be taxed and penalized.) An IRA would give you vastly more investment options, but if your 403(b) allows loans you’d lose the ability to borrow against your account. Also, workplace retirement plans such as 403(b)s and 401(k)s typically allow penalty-free withdrawals starting at age 55 if you leave your job, while with IRAs you generally must wait until age 59½.

The question remains if you should consider investing in the new district’s plan. The answer is yes if it includes any of 403bwise’s “green” rated options of low-cost funds. The answer is probably no otherwise. Teachers without good investment options should consider lobbying their district to adopt another type of retirement account, the 457(b) plan. For more information, check out 403bwise’s sister site, 457bwiser, at https://457bwiser.org/.