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February 28, 2009

Beneficiary Options- Roth IRA Vs. Traditional IRA


Beneficiary Options- Roth IRA Vs. Traditional IRA

Are the distribution options for beneficiaries of Roth IRAs the same as those that apply to beneficiaries of a Traditional IRA?

It depends.

Bear in mind that the distribution options for beneficiaries of a traditional IRA depend on whether the IRA owner dies before the required beginning date (RBD).

Because Roth IRA owners are not subject to the required minimum distribution (RMD) rules, there is no RBD for Roth IRAs. Therefore, the distribution options for Roth IRAs are usually the same as those that apply to a Traditional IRA when the owner dies before the RBD. The IRA agreement must be consulted to be sure, as the custodian ultimately determines whether they want to offer both the five-year and the life-expectancy options.

Some IRA agreements limit a spouse beneficiary’s options to treating the Roth IRA as his/her own, instead of choosing to treat the account as an inherited Roth IRA.

For a high level summary of the options, see


Written By

Denise Appleby

Denise is CEO of Appleby Retirement Consulting Inc., a firm that provides IRA resources for financial/ tax/legal professionals. She has over 20 years of experience in the retirement plans field, which includes training and technical consultation.

Denise writes and publishes educational /marketing tools for advisors; available at Denise co-authored several books on IRAs

Denise is a graduate of The John Marshall Law School, where she obtained a Masters of Jurisprudence in Employee Benefits, and has earned 5 professional retirement designations.
She has appeared on numerous media programs, sharing her insights on retirement tax laws.


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