The Inherited IRA 10-Year Rule: What Heirs Need to Know

If you have inherited an individual retirement account (IRA) in the last few years, the rules governing how quickly you must withdraw the money have changed significantly, and many beneficiaries are unaware of the deadlines now in effect. Misunderstanding them can be costly, so it is worth understanding the framework before the end of the year.

Where did the 10-year rule come from?

The SECURE Act, which applies to account owners who died on or after January 1, 2020, eliminated the long-standing "stretch IRA" for most non-spouse beneficiaries. In its place is what is commonly called the 10-year rule: most beneficiaries who are not the spouse of the deceased must fully empty the inherited account by the end of the tenth year following the year of the owner's death, according to the IRS guidance on required minimum distributions for beneficiaries. After years of uncertainty, the IRS released final regulations in 2024 clarifying how the rule works.

Do you have to take a withdrawal every year?

It would be simpler if the 10-year rule only required emptying the account by year ten and let you choose the timing. For some beneficiaries, that is exactly how it works. But the final regulations draw an important distinction based on whether the original owner had already reached their required beginning date for required minimum distributions (RMDs) — generally the April 1 after they turn 73 under current law — at the time of death.

If the original owner died before their required beginning date, the beneficiary generally is not required to take a withdrawal in any particular year, as long as the account is empty by the end of year ten. If the original owner died on or after their required beginning date, the beneficiary generally must take an annual withdrawal in years one through nine and empty the account by year ten. Whether either situation applies to you depends on the deceased's age and circumstances, so this is a question to confirm for your specific account rather than assume. While the rules were being finalized, the IRS waived the penalty for these annual withdrawals for 2021 through 2024 — but that relief has ended. For 2025 and later, affected beneficiaries are expected to take them.

What happens if you miss a required withdrawal?

Failing to take a required distribution carries a meaningful cost. The IRS imposes an excise tax of 25% of the amount that should have been withdrawn, reduced from the previous 50%. That penalty can be further reduced to 10% if the shortfall is corrected within the IRS's two-year correction window. These figures are set by the IRS and apply regardless of the size of the account.

Who is exempt from the 10-year rule?

Not everyone is subject to the 10-year rule. The IRS recognizes a category called "eligible designated beneficiaries" who may still be able to stretch distributions over their lifetime. This group includes the surviving spouse, a minor child of the original owner (until age 21, at which point the 10-year rule takes over), an individual who is disabled or chronically ill, and any beneficiary who is not more than 10 years younger than the deceased. Whether you fall into one of these categories depends on your relationship to the owner and your own situation, and the treatment can differ for each.

Why does timing matter beyond the deadline?

Because withdrawals from a traditional inherited IRA are generally taxed as ordinary income, when you take them can affect your tax picture. Concentrating ten years of withdrawals into one or two years could push that income into higher brackets, while spreading them out may have a different effect — but the right approach depends entirely on your other income, your filing status, your age, and your state of residence. There is no single answer that applies to everyone. Inherited Roth IRAs follow the 10-year emptying rule as well, but with an important difference: because a Roth owner has no required beginning date, an inherited Roth never triggers those year-one-through-nine withdrawals — the only requirement is that the account be emptied by year ten. And because qualified Roth withdrawals are generally not taxable, the timing calculus is different again.

If you are weighing how inherited-account withdrawals interact with the rest of your plan, our overview of when Roth conversions make sense and the 2026 IRA and 401(k) contribution limits may be useful context. And if you are evaluating whether to work with an advisor on a question like this, our list of seven questions to ask a financial advisor is a reasonable starting point.

This article is general educational information, not tax or investment advice. The rules summarized here depend on facts specific to your situation, including the date of the original owner's death, their age, your relationship to them, and your own income and residency. Consult a qualified tax professional or advisor before acting.