RMDs · 10 min read
Roth 401(k)s No Longer Have RMDs: What Changed and the Five-Year Clock That Still Matters
Since the 2024 tax year, designated Roth accounts in 401(k), 403(b) and governmental 457(b) plans carry no lifetime required minimum distributions, matching Roth IRAs. What remains is a five-year clock: each plan keeps its own, and it does not follow the money into a Roth IRA. A small, early Roth IRA contribution usually removes that problem.
Until 2024, a Roth 401(k) came with an odd requirement. The owner paid tax on the contributions up front in exchange for tax-free growth, and then, at the required beginning age, had to start withdrawing the money anyway. Many households rolled the account into a Roth IRA for no other reason than to stop those withdrawals. SECURE 2.0 removed the requirement, and with it most of the pressure to roll. (26 U.S.C. §402A(d)(5), added by SECURE 2.0 §325)
This guide covers what changed, how a Roth 401(k) now compares with a Roth IRA, and the one timing rule that still deserves attention before any rollover. It is educational; the treatment of a specific account should be confirmed with a tax professional.
What the Question Is Really Asking
When people ask whether a Roth 401(k) still has RMDs, they are usually deciding something else: whether Roth money can stay in the employer plan for life, whether a rollover still accomplishes anything, and whether moving the money could cost them tax-free treatment on its growth. The first two answers are now simple. The third turns on a five-year clock that the RMD repeal did not touch.
The Rule Change: No Lifetime RMDs From Designated Roth Accounts
For taxable years beginning after December 31, 2023, the lifetime distribution rules of the tax code no longer apply to designated Roth accounts. That covers the Roth portion of a 401(k), a 403(b), and a governmental 457(b). Distributions required for 2023 or earlier were not excused, even when they were paid in 2024. (§402A(d)(5) and effective-date note; IRS RMD FAQs)
| Account | Lifetime RMDs | Required beginning age |
|---|---|---|
| Traditional (pre-tax) 401(k), 403(b) or IRA | Yes | 73; 75 for those born in 1960 or later |
| Roth 401(k), Roth 403(b), Roth governmental 457(b) | No, since the 2024 tax year | Not applicable while the owner is living |
| Roth IRA | No, since the account was created in 1997 | Not applicable while the owner is living |
In practical terms, Roth plan dollars can now remain invested for the owner’s lifetime with no annual calculation and no first-RMD deadline. What the change removes is the obligation to withdraw, not the account’s other rules.
How a Roth 401(k) Now Compares With a Roth IRA
With RMDs off the table, the choice between keeping Roth money in a plan and moving it to a Roth IRA rests on smaller, more technical differences. The ones that matter most for planning:
| Feature | Roth 401(k) / 403(b) / 457(b) | Roth IRA |
|---|---|---|
| Lifetime RMDs | None since 2024 | None |
| Income limit on contributions | None | Phases out at $153,000–$168,000 (single) and $242,000–$252,000 (joint) in 2026 |
| 2026 contribution room | $24,500, shared with pre-tax deferrals, plus catch-ups | $7,500, or $8,600 at 50 and older |
| Five-year clock | One per plan, from the first Roth deferral to that plan | One per person, across every Roth IRA owned |
| Non-qualified withdrawal | Pro rata: each dollar is part contribution, part earnings | Contributions come out first, then conversions, then earnings |
| After the owner’s death | Post-death distribution rules apply | Post-death distribution rules apply |
(IRS Notice 2025-67; IRS designated Roth account FAQs; IRS Publication 590-B)
The withdrawal row is easy to miss. If a Roth 401(k) holds $110,000 of contributions and $40,000 of growth, the IRS treats any non-qualified withdrawal from the plan as 110/150 contributions and 40/150 earnings. The same money in a Roth IRA would be sourced from contributions first, so a withdrawal of up to $110,000 would carry no tax at all. (IRS designated Roth account FAQs) That difference matters only before a distribution is qualified, but for someone retiring in their mid-fifties it can matter a great deal.
The Five-Year Clock the Repeal Left in Place
Earnings leave a Roth account tax-free only in a qualified distribution: one made after age 59½ (or on death or disability) and after a five-taxable-year period. For a designated Roth account, that period starts on the first day of the tax year of the owner’s first Roth deferral to that plan. (§402A(d)(2); 26 CFR §1.402A-1, Q&A-4)
Where the money goes next decides whether that history comes with it:
- Direct rollover to another employer’s Roth account. The receiving plan can use the earlier start date. The years carry over.
- Rollover to a Roth IRA. The years spent in the plan do not count. The money takes on the Roth IRA’s clock, which runs from the owner’s first Roth IRA contribution or conversion. If the Roth IRA is opened by the rollover itself, the clock starts that year. (IRS designated Roth account FAQs)
Two facts soften this considerably. First, if the plan distribution was itself qualified, the entire amount rolled over is treated as a regular contribution to the Roth IRA. Only growth after the rollover then waits on the IRA’s clock. (26 CFR §1.408A-10, Q&A-3) Second, contributions in a Roth IRA can always be withdrawn without tax or penalty, so the clock governs only the earnings layer, which comes out last.
The exposure therefore concentrates in one situation: a rollover made before the plan distribution is qualified, usually before 59½, into a Roth IRA that is new or recent. The remedy is inexpensive. Opening a Roth IRA with a small contribution years before any rollover starts the IRA’s clock early, and a contribution made by the April filing deadline for the prior tax year starts it on January 1 of that prior year. Where income is too high for a direct contribution, a small conversion also starts the clock. Our guide to the two Roth five-year clocks covers the full mechanics.
The plan’s five-year history stays with the plan; a Roth IRA funded early, even modestly, means a rollover arrives at an account whose clock is already running.
The 2026 Contribution Figures
The repeal changed nothing about contributions, and the plan’s two structural advantages over a Roth IRA remain: no income limit and far more room. (IRS news release; IRS Notice 2025-67)
| 2026 limit | Workplace plan (pre-tax and Roth combined) | IRA (traditional and Roth combined) |
|---|---|---|
| Base | $24,500 | $7,500 |
| With age-50 catch-up | $24,500 + $8,000 = $32,500 | $7,500 + $1,100 = $8,600 |
| Turning 60 through 63 in 2026 | $24,500 + $11,250 = $35,750 | $8,600 |
One 2026 change reaches the Roth side directly. A participant whose prior-year wages from the plan sponsor exceeded $150,000 must make any catch-up contributions as Roth. (IRS Notice 2025-67) For higher earners, that means more Roth plan money accumulating whether or not they chose it; see the $11,250 super catch-up.
A Hypothetical Saver, Three Paths
This illustration is hypothetical and simplified. It ignores market movement, assumes income within the Roth IRA contribution limits, and is not a recommendation.
Consider a saver who turns 57 in March 2026 and reaches 59½ in September 2028. The saver has made Roth 401(k) deferrals since 2020, so the plan’s five-year period was satisfied at the end of 2024. The account holds $150,000: $110,000 of contributions and $40,000 of growth. The saver has never owned a Roth IRA and plans to retire in 2027 at 58.
| Path | What happens | Roth IRA clock satisfied | Result |
|---|---|---|---|
| A. Roll at 58 into a new Roth IRA | The plan distribution is not qualified (under 59½). $110,000 enters as contributions, $40,000 as earnings. | January 1, 2032 | Growth withdrawn before 2032 is taxable, though after 59½ no penalty applies |
| B. Contribute to a Roth IRA by April 15, 2026 for tax year 2025, then roll at 58 | Same split at rollover, but the IRA’s clock began January 1, 2025. | January 1, 2030 | Two years sooner than Path A, for the cost of one small contribution |
| C. Leave the money in the plan until after 59½, then roll | The distribution is qualified, so the full balance enters the Roth IRA as contributions. | Matters only for growth after the rollover | The plan’s history is effectively preserved |
In Path A, the ordering rules still protect the saver: the first $110,000 withdrawn from the Roth IRA is contribution money and comes out tax-free. The clock reaches only the $40,000 of earnings, and only if withdrawals exceed $110,000 before 2032.
Suppose instead the saver keeps the money in the plan and withdraws $20,000 at 58, before the distribution is qualified. The pro rata rule applies: $20,000 × 110/150 = about $14,667 of contributions and $5,333 of earnings. The earnings are taxable. Normally they would also carry the 10 percent additional tax, but because the saver left this employer after the year of turning 55, the rule of 55 removes it. (IRS Tax Topic 558) Rolled to a Roth IRA first, the same $20,000 would have been all contributions and fully tax-free.
No single path wins on every count. The plan offers the rule of 55 but pro rata taxation; the Roth IRA offers favorable ordering but its own clock. A small Roth IRA contribution in 2026 improves every path.
How We Approach This in a Plan
We treat the location of Roth money as a coordination question rather than a default. With RMDs gone, the decision is about access, ordering and heirs.
- Taxes and withdrawal order. Roth dollars are the most flexible layer in a retirement income plan because qualified withdrawals add nothing to taxable income. We decide when to draw them alongside taxable and pre-tax accounts; see the order in which you draw down accounts.
- Pre-tax balances in the same plan. The repeal is limited to the Roth side. Pre-tax dollars in the same 401(k) still have RMDs at 73 or 75, and we plan those distributions, and any conversions that shrink them, using the window before required withdrawals and our analysis of when Roth conversions pay off.
- Social Security and Medicare. Qualified Roth withdrawals do not count toward the income that determines how much Social Security is taxed or whether Medicare IRMAA surcharges apply. Having Roth money available in a high-income year is one of the simplest ways to stay below a threshold.
- Estate. Heirs still face post-death rules. Most non-spouse beneficiaries must empty an inherited Roth account within ten years, though qualified withdrawals remain tax-free. (IRS Publication 590-B) The inherited IRA 10-year rule explains the timing.
Questions Worth Answering Before You Decide
- In what tax year did the first Roth deferral go into each plan, and has that plan’s five-year period ended?
- Does a Roth IRA already exist, and in what tax year was it first funded?
- Will any Roth money be needed before 59½, and would it come from the plan (pro rata) or a Roth IRA (contributions first)?
- Did the separation from this employer occur in or after the year of turning 55, making the rule of 55 available on the plan?
- How do the plan’s investment menu, fees and withdrawal options compare with an IRA’s?
- How much pre-tax money sits in the same plan, and what will its RMDs look like?
What This Does Not Mean
- It does not mean the whole 401(k) is exempt. Only the designated Roth account is. Pre-tax deferrals, and pre-tax employer contributions, still require distributions.
- It does not mean heirs escape distribution rules. The repeal applies during the owner’s lifetime only.
- It does not mean a rollover is a mistake. Fees, investment choices, consolidation and the Roth IRA’s ordering rules remain legitimate reasons to roll. The timing is what deserves care.
- It is not personalized advice. Whether a particular distribution is qualified, and how it is reported, belongs with a tax professional who can see the account history.
Frequently Asked Questions
Q: Does a Roth 401(k) still have required minimum distributions?
No. Starting with the 2024 tax year, designated Roth accounts in 401(k), 403(b) and governmental 457(b) plans have no lifetime RMDs, the same treatment Roth IRAs have always had. Beneficiaries remain subject to post-death rules.
Q: Is there still a reason to roll a Roth 401(k) into a Roth IRA?
Avoiding RMDs is no longer one. Fees, investment choices, consolidation, and the Roth IRA's contributions-first withdrawal ordering can still justify a rollover, as long as the five-year clock has been considered.
Q: Does my Roth 401(k)'s five-year history transfer to a Roth IRA?
No. The money takes the Roth IRA's clock, which runs from your first Roth IRA contribution or conversion. If the plan distribution was qualified, though, the whole rollover counts as contributions, so only later growth depends on the IRA's clock.
Q: How can I protect against the clock restarting?
Fund a Roth IRA with a small contribution, or a small conversion if income is too high, well before any rollover. A contribution made by the April deadline for the prior year starts the clock on January 1 of that prior year.
Q: What are the 2026 Roth 401(k) contribution limits?
$24,500 of combined pre-tax and Roth deferrals, plus an $8,000 catch-up at 50 or older, or $11,250 for those turning 60 through 63, for a maximum of $35,750. There is no income limit.
Q: Do pre-tax dollars in the same 401(k) still have RMDs?
Yes. The exemption covers only the designated Roth account. Pre-tax balances in the same plan still require distributions beginning at 73, or 75 for those born in 1960 or later.
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Sources and further reading
- 26 U.S.C. §402A (SECURE 2.0 §325; qualified distributions)
- IRS, Retirement plan FAQs regarding required minimum distributions
- IRS, Retirement plans FAQs on designated Roth accounts
- 26 CFR §1.402A-1 (designated Roth accounts)
- 26 CFR §1.408A-10 (rollovers of designated Roth money to a Roth IRA)
- IRS Notice 2025-67 (2026 limits)
- IRS news release: 2026 plan and IRA limits
- IRS Publication 590-B
- IRS Tax Topic 558
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The views and opinions expressed here are those of The Financial Sciences Company as of the publish date and are provided for informational and educational purposes only. They are not personalized investment, tax, or legal advice. The Financial Sciences Company, LLC is a registered investment adviser. Registration does not imply a certain level of skill or training. Additional information is available in our Form ADV at adviserinfo.sec.gov.
General educational information, current as of 2026. Figures and rules change. For guidance specific to your situation, speak with a qualified professional.