The 5-year rule imposes a waiting period for them. It states that the Roth IRA must be at least five years old before you can withdraw any of your earnings from an IRA Gold account. Any individual beneficiary can choose to distribute assets inherited from the IRA Gold account for five years after the owner's death. The distribution must be completed before the end of the year that marks the fifth anniversary of the owner's death. Any non-individual beneficiary (except a qualified trust) must use the five-year rule if the owner died before starting to accept RMDs.
A Roth IRA is an individual retirement plan that, except for what is explained in this chapter, is subject to the rules that apply to a traditional IRA (defined below). The minimum distribution rules that apply to traditional IRAs do not apply to Roth IRAs long as the owner is alive. The 5-year rule for Roth IRAs states that you cannot withdraw profits from your Roth IRA account unless five years have passed since you made your first contribution to your account. However, after the death of the owner of a Roth IRA, some of the minimum distribution rules that apply to traditional IRAs also apply to Roth IRAs, as explained later in Distributions after the owner's death.
If the owner of a Roth IRA dies, the minimum distribution rules that apply to traditional IRAs apply to Roth IRAs, as if the owner of a Roth IRA died before the required start date. The 10-year rule requires that IRA beneficiaries who are not accepting life expectancy payments withdraw their entire IRA balance before December 31 of the year that marks the tenth anniversary of the owner's death. The second 5-year rule determines whether the distribution of capital from converting a traditional IRA to a Roth IRA is exempt from penalties. The 5-year rule requires that IRA beneficiaries who are not accepting life expectancy payments withdraw their entire IRA balance before December 31 of the year that marks the fifth anniversary of the owner's death.
