What is the inherited IRA 10-year rule?
Key takeaways
- Most non-spouse heirs of an IRA owner who died in 2020 or later must empty the account by December 31 of the year containing the 10th anniversary of the death, so an owner who died in 2025 means a December 31, 2035 deadline.1
- You can withdraw on any schedule only if the owner died before their required beginning date. If the owner had already started RMDs, you'll owe an RMD in each of years 1 to 9 and the rest by year 10.
- Spouses, minor children, disabled or chronically ill heirs, and heirs not more than 10 years younger than the owner can stretch withdrawals over their life expectancy instead.
In this article
- What is the inherited IRA 10-year rule?
- Who is exempt from the inherited IRA 10-year rule?
- Do you have to take RMDs every year under the 10-year rule?
- Inherited IRA rules for a surviving spouse
- How the 10-year rule works for an inherited Roth IRA
- 4 differences between the 10-year rule and a stretch IRA
- Inherited IRA 10-year deadlines by year of death
- How to apply the inherited IRA 10-year rule in 4 steps
- Check your inherited IRA withdrawals with the Tweed Inherited IRA RMD Calculator
- Frequently asked questions about the inherited IRA 10-year rule
Key takeaways
- Most non-spouse heirs of an IRA owner who died in 2020 or later must empty the account by December 31 of the year containing the 10th anniversary of the death, so an owner who died in 2025 means a December 31, 2035 deadline.1
- You can withdraw on any schedule only if the owner died before their required beginning date. If the owner had already started RMDs, you'll owe an RMD in each of years 1 to 9 and the rest by year 10.
- Spouses, minor children, disabled or chronically ill heirs, and heirs not more than 10 years younger than the owner can stretch withdrawals over their life expectancy instead.
The inherited IRA 10-year rule requires most people who inherit an IRA from someone who died in 2020 or later to withdraw the entire balance by the end of the 10th year after the death. Whether you also owe a withdrawal every year in between depends on whether the owner had reached their required beginning date. This guide explains who the rule applies to, who is exempt, how it treats spouses and Roth IRAs, and how to plan the withdrawals.
What is the inherited IRA 10-year rule?
The inherited IRA 10-year rule requires a beneficiary who isn't an eligible designated beneficiary to empty an IRA inherited from an owner who died in 2020 or later by December 31 of the year containing the 10th anniversary of the death.2 The SECURE Act created the rule and it replaced the old stretch IRA for most heirs, so it covers adult children, grandchildren, and most other individual heirs. Deaths before 2020 keep the old rules.
Year 1 is the calendar year after the death. An owner who died in 2025 leaves an account that must be empty by December 31, 2035, and you can take a lump sum at any point before then. The rule sets the deadline for the whole balance, and the RMD rules decide whether you also owe a withdrawal in the years before it.
Who is exempt from the inherited IRA 10-year rule?
Five kinds of beneficiaries, called eligible designated beneficiaries, are exempt from the 10-year rule and can take life-expectancy withdrawals instead. Your status is fixed as of the owner's death, and the IRS settles who the beneficiaries are on September 30 of the year after the death.
| Eligible designated beneficiary | What they can do instead of the 10-year rule |
|---|---|
| Surviving spouse | Treat the IRA as their own, or keep it as an inherited IRA and take life-expectancy withdrawals |
| The owner's minor child, until age 21 | Take life-expectancy withdrawals until their 21st birthday, then empty the account within 10 years |
| Disabled individual | Take life-expectancy withdrawals |
| Chronically ill individual | Take life-expectancy withdrawals |
| Individual not more than 10 years younger than the owner | Take life-expectancy withdrawals |
The minor-child row covers only the owner's own child, not a grandchild, and the regulation sets the cutoff plainly: "An individual reaches the age of majority on the individual's 21st birthday."3
Estates, charities, and trusts aren't eligible designated beneficiaries. A trust that meets the IRS requirements can have its own beneficiaries treated as designated beneficiaries. An estate, a charity, or a trust that doesn't meet those requirements faces stricter rules, including emptying the account within 5 years when the owner died before their required beginning date.
Do you have to take RMDs every year under the 10-year rule?
Whether you have to take RMDs every year under the 10-year rule depends on whether the owner had reached their required beginning date. That date is April 1 of the year after the owner reached RMD age, which is 73 or 75 depending on the owner's birth year. The RMD table lists the owner's factor at each age.
If the owner died before their required beginning date
If the owner died before their required beginning date, no withdrawal is required in years 1 to 9. In the words of IRS Publication 590-B, "no distribution is required for any year before the 10th year." You choose the schedule, as long as the account is empty by December 31 of year 10.
If the owner died on or after their required beginning date
If the owner died on or after their required beginning date, you'll owe an RMD in each of years 1 to 9, based on the longer of your single life expectancy or the owner's remaining life expectancy, and the remaining balance by the end of year 10.4 The amount uses the Single Life Expectancy table, Table I, in IRS Publication 590-B, and the Tweed Inherited IRA RMD Calculator works it out for you.
The IRS waived the penalty for missed annual RMDs under the 10-year rule from 2021 through 2024, so from 2025 a missed one carries the 25% excise tax, or 10% if corrected within two years.5 If you miss one, take it as soon as you notice and file Form 5329.
Inherited IRA rules for a surviving spouse
The inherited IRA rules give a surviving spouse who is the sole beneficiary the most options, and a spouse is never forced onto the 10-year rule.
Treat the inherited IRA as your own
To treat the inherited IRA as your own, designate yourself as the owner or roll the money into your own IRA. Your own RMD age, 73 or 75 depending on your birth year, then applies, and the account follows the same rules as any IRA you opened yourself.
Keep it as an inherited IRA
If you keep it as an inherited IRA, you take life-expectancy withdrawals. When the owner died before their required beginning date, you can delay the first one until December 31 of the year the owner would have reached RMD age, 73 or 75 depending on the owner's birth year.
How the 10-year rule works for an inherited Roth IRA
The 10-year rule works for an inherited Roth IRA the same way it works for a traditional IRA, with one difference: the IRS treats every Roth owner as dying before the required beginning date, because Roth owners never have RMDs. So a non-spouse Roth heir on the 10-year rule has no annual RMDs, only the year-10 deadline.
Withdrawals of contributions are tax-free, and earnings are tax-free unless the Roth was less than 5 years old at the withdrawal. Because nothing is taxed, leaving the money in until late in year 10 keeps it growing tax-free for the longest. A spouse can treat an inherited Roth IRA as their own or delay withdrawals.
4 differences between the 10-year rule and a stretch IRA
A stretch IRA means taking life-expectancy RMDs from an inherited IRA, which only eligible designated beneficiaries can still do. The 4 differences between the 10-year rule and a stretch IRA are who can use them, how long the money can stay, whether you take yearly withdrawals, and how the tax bill is spread.
| Rule | 10-year rule | Stretch IRA |
|---|---|---|
| Who can use it | Any individual beneficiary; required for those who aren't eligible designated beneficiaries | Eligible designated beneficiaries only |
| How long the money can stay | Until December 31 of year 10 | For the beneficiary's life expectancy, reduced by 1 each year |
| Yearly withdrawals | Only if the owner died on or after their required beginning date | Every year, starting the year after the death |
| How the tax is spread | Over 10 years at most | Over many more years, in smaller amounts |
Inherited IRA 10-year deadlines by year of death
The inherited IRA 10-year deadline falls on December 31 of the 10th year after the year of the owner's death.
| Year of the owner's death | Account must be empty by |
|---|---|
| 2020 | December 31, 2030 |
| 2021 | December 31, 2031 |
| 2022 | December 31, 2032 |
| 2023 | December 31, 2033 |
| 2024 | December 31, 2034 |
| 2025 | December 31, 2035 |
| 2026 | December 31, 2036 |
How to apply the inherited IRA 10-year rule in 4 steps
You can apply the inherited IRA 10-year rule in 4 steps: find the owner's dates, confirm your beneficiary type, take any RMD left from the year of death, and set a schedule that empties the account in time.
Step 1: Find the owner's date of death and required beginning date
Ask the custodian for the date of death on file and the owner's birth year. The birth year gives the owner's RMD age, and that tells you whether the owner had reached the required beginning date.
Step 2: Confirm your beneficiary type
Confirm your beneficiary type with the exempt-beneficiary table above. If you qualify as an eligible designated beneficiary, decide between a stretch IRA and the 10-year rule before the custodian's election deadline.
Step 3: Take any RMD the owner still owed for the year of death
If the owner died on or after their required beginning date and hadn't taken that year's RMD, take the rest of it by December 31 of the year of death. Ask the custodian how much the owner had already withdrawn that year.
Step 4: Set a withdrawal schedule that empties the account by year 10
Put December 31 of year 10 on your calendar, add any annual RMDs from the section above, and choose the years you'll take the rest. The traditional IRA guide and Roth vs traditional IRA explain how each kind of withdrawal is taxed.
Check your inherited IRA withdrawals with the Tweed Inherited IRA RMD Calculator
Enter the owner's birth year, the year of death and your age, and the Tweed Inherited IRA RMD Calculator shows whether you owe an RMD this year and how much. For an IRA or 401(k) you own, the Tweed RMD Calculator returns this year's RMD and a multi-year projection.
Frequently asked questions about the inherited IRA 10-year rule
How are inherited IRA withdrawals taxed?
Inherited IRA withdrawals are taxed as ordinary income in the year you take them, because beneficiaries must include every taxable distribution in gross income. Beneficiaries don't owe the 10% early withdrawal tax, whatever their age. Withdrawals from an inherited Roth IRA are tax-free, except earnings when the Roth was less than 5 years old.
Is there any way to avoid taxes on an inherited IRA?
There's no way to take money out of an inherited traditional IRA tax-free, but two rules can lower the bill. If the owner made nondeductible contributions, that basis stays with the IRA and comes out tax-free, reported on its own Form 8606. If the estate paid federal estate tax, you can deduct the share tied to your withdrawals.
What is the smartest thing to do with an inherited IRA?
The smartest thing to do with an inherited IRA depends on your income in each of the 10 years. Heirs usually compare three schedules: one lump sum, which is taxed in a single year; equal withdrawals each year; or larger withdrawals in lower-income years. Waiting until year 10 is only possible when no annual RMDs apply.
What happens if the beneficiary dies during the 10 years?
If the beneficiary dies during the 10 years, the next beneficiary inherits what's left but doesn't get a new life expectancy. The next beneficiary must keep taking any required annual RMDs and empty the account within 10 years of the first beneficiary's death or, in some cases, by the original owner's 10-year deadline.
Does the 10-year rule apply to an inherited 401(k)?
Yes, the 10-year rule applies to an inherited 401(k), because the SECURE Act changed the beneficiary rules for workplace retirement plans and IRAs together. The plan document decides which withdrawal options you're offered, so the IRS tells beneficiaries to contact the plan administrator before taking a distribution from a 401(k) or other qualified plan.
Sources
- https://www.irs.gov/publications/p590b
- https://www.irs.gov/retirement-plans/plan-participant-employee/retirement-topics-beneficiary
- https://www.ecfr.gov/current/title-26/section-1.401(a)(9)-4
- https://www.ecfr.gov/current/title-26/section-1.401(a)(9)-5
- https://www.irs.gov/pub/irs-drop/n-24-35.pdf
This page describes federal rules for individuals who inherit an IRA from an owner who died in 2020 or later. Figures are for 2026.
Tweed provides educational information, not financial advice. Nicolas Straut is a personal finance writer, not a financial advisor.
Personal finance writer, former Forbes contributor and This Week in Fintech writer. He isn't a financial advisor or a CPA.
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