For the 2024 tax year and every year since, a designated Roth account held inside a 401(k) or 403(b) has stopped forcing its owner to take money out during retirement. The shift closed a long-standing gap: Roth IRAs had never carried lifetime required minimum distributions, yet the workplace version of the same after-tax savings did, pushing many retirees to drain or relocate balances they had already paid tax on. The change is narrow but consequential, and it does nothing to loosen the pretax accounts that still start a mandatory withdrawal clock.
The quirk SECURE 2.0 erased
Before 2024, the tax code treated the Roth side of an employer plan differently from a Roth IRA. A saver who funded a Roth IRA could leave every dollar untouched for life, letting it grow tax-free with no schedule attached. A saver who used the Roth option inside a 401(k) or 403(b) faced the opposite rule: once they reached the required-minimum-distribution age, the plan had to pay out a slice of that Roth balance each year, even though the contributions had already been taxed on the way in.
Section 325 of the SECURE 2.0 Act rewrote that treatment, and the Internal Revenue Service confirms the rules requiring minimum distributions during an owner’s lifetime no longer apply to a designated Roth account for taxable years beginning after December 31, 2023. In practice, that made the in-plan Roth behave like the Roth IRA it always resembled: contributions and their growth can now sit in the account for the account holder’s entire life without a forced payout.
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What still triggers a required withdrawal
The relief is limited strictly to Roth money. Pretax balances in a traditional 401(k) or a traditional IRA remain subject to required minimum distributions, and the starting age is now 73 under the same law. Those distributions count as ordinary taxable income, which is the mechanism the rule change leaves fully in place. A retiree who split contributions between pretax and Roth buckets inside one plan still has to draw down the pretax portion on the same annual timetable.
The coordination is where retirees are most likely to stumble. Someone who assumes the SECURE 2.0 change freed the entire 401(k) from withdrawals could fall short, because the plan’s pretax subaccount is measured on its own. The Roth portion now sits outside that calculation, but the pretax balance, its prior-year value, and the account holder’s age still combine into a required figure the plan reports each year.
The distinction matters because a designated Roth account and a pretax account can coexist under a single plan number. Eliminating the Roth withdrawal requirement does not shrink the pretax distribution, and it does not lower the tax owed on it. The reform simply removes the odd outcome in which after-tax dollars were pushed out of the plan and, once distributed, lost the tax-free compounding that is the entire reason to choose Roth in the first place.
The stakes on the pretax side are higher than they once were. The same law that freed Roth accounts also raised the starting age for required distributions to 73 and scheduled it to move to 75 in 2033, and it softened the penalty for a missed distribution to 25 percent of the shortfall, or 10 percent when the error is corrected promptly, down from a longstanding 50 percent. None of that touches Roth balances, but it underscores that the withdrawal regime lifted from Roth savings still governs pretax dollars with real consequences for mistiming a payout.
Heirs, and the rollover move that lost its urgency
The lifetime reprieve stops at death. Beneficiaries who inherit a Roth 401(k) or Roth IRA are still subject to required minimum distribution rules, and most non-spouse heirs must empty the account within ten years under the SECURE Act’s inheritance timeline. Those heirs generally owe no income tax on the withdrawals, but the balance cannot grow untouched indefinitely the way it can for the original owner, so the tax-free runway has a hard endpoint.
Spouses who inherit are the exception to that squeeze. A surviving spouse can generally treat an inherited Roth account as their own, folding it into their own Roth IRA and restoring the same lifetime freedom from withdrawals the original owner enjoyed. Children and other non-spouse heirs cannot, which is why the ten-year window is where tax-free growth finally ends for most inheritances, and where the timing of withdrawals inside that decade becomes the heir’s decision rather than a schedule the government sets.
The change also retired a common piece of planning advice. For years, advisers told workers nearing the withdrawal age to roll a Roth 401(k) into a Roth IRA for one reason above all others: the IRA escaped lifetime distributions and the workplace account did not. That specific motive has vanished. Rolling money out can still make sense for broader investment choices or to consolidate scattered accounts, but no one now has to move Roth workplace savings solely to shield them from a forced annual payout.
Keeping the money in the plan carries its own advantages that the old rule used to undercut. Workplace balances often qualify for stronger creditor protection than an IRA, may offer access to institutional investment pricing, and can support plan loans while the saver is still working. Before 2024, those benefits came at the cost of mandatory Roth withdrawals, forcing a tradeoff. Removing the distribution requirement lets a saver weigh those features on their merits rather than being driven out of the plan by the calendar.
The result is a cleaner set of decisions at retirement. Tax-free Roth savings, whether in an IRA or a workplace plan, can compound for the account holder’s full lifetime, while pretax balances still surrender a taxable slice every year beginning at 73. The one clock that keeps running for Roth money starts only at death, when heirs inherit both the balance and a ten-year deadline to withdraw it.
This article was produced with AI assistance and reviewed by The Money Overview editorial team.
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