Inherited IRA Rules: How the 10-Year Rule Actually Works

When Did the 10-Year Rule Start?

The SECURE Act of 2019 replaced the old lifetime “stretch IRA” for most non-spouse beneficiaries. If you inherit an IRA from someone who died in 2020 or later, you generally must empty the account by December 31 of the tenth year after the year of death. If the owner died in 2026, the deadline is December 31, 2036.

The IRS settled the remaining details in final regulations issued in July 2024 (T.D. 10001), effective for distribution years beginning January 1, 2025. Those regulations answer the question that confused beneficiaries for four years: whether anything is owed before the year-10 deadline.

Do You Also Owe Annual Withdrawals? Check One Date

The answer depends on the owner's required beginning date, which is the date the owner had to start taking their own required minimum distributions, the annual withdrawals the IRS mandates from pre-tax retirement accounts in later life.

For an individual designated beneficiary who is not an eligible designated beneficiary, the owner's required beginning date determines annual withdrawals under the 10-year rule. If the owner died on or after that date, annual required minimum distributions generally begin the year after death, and the account must still be emptied by year ten. The final regulations apply starting in 2025. If the owner died before that date, the 10-year rule does not require annual withdrawals before the final year.

The IRS waived penalties for annual withdrawals missed from 2021 through 2024 while the rules were unsettled, and those missed amounts do not need to be made up. The 10-year deadline itself was never extended. Because the right answer depends on the owner's age and death date, talk with a tax professional about your specific deadline before you build a plan around it.

Inherited Roth IRAs: No Annual Withdrawals, One Deadline

Roth IRA owners have no required beginning date, because Roth IRAs have no lifetime required distributions. That means a beneficiary under the 10-year rule owes no annual withdrawals in years one through nine, only the full withdrawal by the end of year ten.

Qualified Roth withdrawals are tax-free. Before choosing when to withdraw, confirm the Roth IRA's five-year holding period with the custodian and consider your cash needs. The ten-year deadline still applies to a beneficiary subject to that rule.

Who Can Still Stretch: Eligible Designated Beneficiaries

A short list of beneficiaries, called eligible designated beneficiaries, can still take distributions over their own life expectancy instead of ten years:

• A surviving spouse, who also has additional options, including treating the inherited IRA as their own.
• A minor child of the account owner, until the child turns 21, after which a ten-year payout period applies.
• A disabled or chronically ill individual.
• A beneficiary not more than ten years younger than the owner, such as a sibling close in age.

Spreading Traditional IRA Withdrawals to Manage Brackets

Withdrawals from an inherited traditional IRA are ordinary taxable income to you in the year you take them. Waiting until year ten and taking everything at once stacks the entire balance into a single tax year, which can push you into higher brackets and undo years of careful planning.

Spreading withdrawals across the ten years is often the calmer path: take more in lower-income years, such as a retirement gap year or a season between jobs, and less in your highest-earning years. If annual withdrawals are required in your case, they set a floor, not a ceiling, and you can always take more in a year when it makes tax sense.

The right pattern depends on your income, your state, and the account's size, which is why an hour with a CPA early in the ten years tends to be worth more than one in year nine.

Keep the Deadline With the Account Records

Keep the owner's date of death, beneficiary designation, custodian instructions, and withdrawal records together. Ask the custodian or your tax professional to confirm both the final deadline and any annual withdrawal requirement before moving money.