Traditional IRAs and individual retirement annuities are subject
to the required minimum distribution (RMD) rules which generally
require that distribution begin by April 1 following the calendar
year in which the IRA owner attains age 70-1/2. A 50% excise tax is
imposed on any amounts which should have been distributed under the
RMD rules but were not distributed on a timely basis, unless the
IRS waives the tax.
Roth IRAs are not subject to the RMD rules, insofar as the IRA
owner is concerned; however, the post-death RMD rules
which apply to traditional IRAs also apply to Roth IRAs, except in
situations in which the designated beneficiary is the surviving
spouse. Thus, the entire interest in a Roth IRA which passes to a
non-spouse beneficiary must be distributed: (1) by the end of the
fifth calendar year after the year of the owner’s death (the
“five-year rule”); or (2) over a period not greater
than the non-spouse beneficiary’s life expectancy, with
distribution
