Quick Answer:
Most non-spouse beneficiaries must empty an inherited IRA within 10 years of the owner’s death. If the original owner had already started their own RMDs, you must also take an annual RMD in years 1 through 9, then empty the account by year 10. Certain heirs, called eligible designated beneficiaries, are exempt and can still stretch withdrawals.
Key takeaways:
– Most non-spouse heirs who inherited after 2019 must empty the account within 10 years.
– If the original owner had already begun RMDs, annual withdrawals are required in years 1 through 9 too.
– If the owner died before their RMD start date, no annual withdrawals are required, only full payout by year 10.
– Eligible designated beneficiaries, including spouses and minor children, are exempt from the 10-year rule.
Inheriting an IRA sounds simple until you meet the rules. They’ve changed several times in recent years, and getting them wrong triggers penalties. Whether you must draw the account down a little each year or can wait, and how fast the whole thing has to be gone, depends on who you are and when the original owner died. Here’s how it works now.
What is the 10-year rule for inherited IRAs?
The 10-year rule requires most non-spouse beneficiaries to fully empty an inherited IRA by the end of the tenth year after the owner’s death. It replaced the old “stretch IRA,” which had let heirs spread withdrawals across their own lifetimes. Under current law, for accounts inherited after 2019, the money generally has to be out within a decade.
The 10-year clock starts the year after the owner dies, per the IRS required minimum distribution rules. What happens inside those 10 years, whether you must take something every year or can wait until the end, is the part that confuses people, and it depends on a single fact about the original owner.
Do you have to take annual RMDs during the 10 years?
Whether you must take annual RMDs inside the 10-year window depends on whether the original owner had already started their own RMDs. This is the detail that trips up most heirs.
If the owner died on or after their RMD start date, you must take an annual RMD in years 1 through 9, and then empty whatever’s left by the end of year 10. If the owner died before their RMD start date, you don’t have to take anything in years 1 through 9, you just have to have the account fully emptied by year 10. In that case you can let it sit and withdraw it all at the end, or spread it however you like.
The IRS waived penalties for missed annual RMDs in this situation for 2021 through 2024 while the rules were being finalized. Enforcement of the annual-RMD requirement began in 2025, so this is now a live obligation, not a technicality.
Who is exempt from the 10-year rule?
A group called eligible designated beneficiaries is exempt from the 10-year rule and can stillstretch withdrawals over a longer period. If you fall into 1 of these categories, the old
lifetime-stretch approach may still be available to you.
| Beneficiary Type | How They're Treated |
|---|---|
| Surviving spouse | Can treat the IRA as their own, or stretch over their life expectancy. |
| Minor child of the owner | Stretches until age 21, then the 10-year clock starts. |
| Disabled or chronically ill person | Can stretch over their life expectancy. |
| Someone not more than 10 years younger than the owner | Can stretch over their life expectancy. |
| A beneficiary older than the owner | Can use their own life expectancy. |
Everyone else, an adult child, a grandchild, a friend, a sibling more than 10 years younger, is a non-eligible designated beneficiary and falls under the 10-year rule. Spouses have the most flexibility of all, which is why the account type you inherit and your relationship to the owner matter so much.
Why does the timing of withdrawals matter so much?
The timing matters because inherited IRA withdrawals are taxable income, and cramming them into a few years can spike your tax bill. For a working-age heir in their peak earning years, a large inherited traditional IRA emptied over 10 years can stack on top of an already-high income, pushing them into top brackets. Spreading the withdrawals across all 10 years, even when annual RMDs aren’t required, is often smarter than waiting and taking a lump at the end.
The best approach is to plan the drawdown around your own income. Take more in your lower-income years and less in your higher ones, while still meeting any required annual amount and the year-10 deadline. The tax treatment of these withdrawals mirrors the rules for owned accounts, covered in when do RMDs start and how are they calculated. Inherited Roth IRAs follow the 10-year rule too, but qualified withdrawals from them are tax-free, so there’s rarely a reason to rush them.
What should you do first if you inherit an IRA?
If you’ve just inherited an IRA, the first step is to identify which set of rules applies to you before you move any money. Determine your beneficiary type, whether you’re a spouse, an eligible designated beneficiary, or a non-eligible one, and find out whether the original owner had started their own RMDs. Those 2 facts decide everything about your withdrawal schedule.
Then avoid the 2 most common mistakes. Don’t cash out the whole account in a panic, which can create a large, unnecessary tax bill in a single year. And don’t roll an inherited IRA into your own IRA unless you’re a spouse, because for a non-spouse that move can accidentally trigger full taxation of the account. Set up a properly titled inherited IRA instead, and plan the drawdown around your own income across the 10 years.
Frequently Asked Questions
Does the 10-year rule apply to inherited Roth IRAs?
Yes, non-spouse heirs must empty an inherited Roth within 10 years. But because qualified Roth withdrawals are tax-free, most heirs let it grow and withdraw at the end of the 10 years to capture the most tax-free growth.
What if I inherited the IRA before 2020?
Older inheritances generally follow the prior stretch rules, letting you continue lifetime withdrawals based on your life expectancy. The 10-year rule applies to deaths after 2019.
Can a spouse avoid the 10-year rule?
Yes. A surviving spouse can treat the inherited IRA as their own or remain a beneficiary and stretch withdrawals, which is far more flexible than the 10-year rule. Spouses have options no other beneficiary has.
What happens if I miss a required annual RMD on an inherited IRA?
You face the same excise tax as any missed RMD, currently 25%, reduced to 10% if corrected promptly. Because enforcement resumed in 2025, it’s important to confirm whether your situation requires annual
withdrawals.
Inherited IRA rules are unforgiving and have changed repeatedly, so it’s worth confirming exactly which set applies to you before you take, or skip, a withdrawal. If you’ve inherited an account and want a tax-smart drawdown plan, request a meeting and we’ll build it around your income.
About the Author
Kurt Supe, CPA, is a Retirement Planner and Chief Investment Officer for Creative Financial Group. He has spent 30 years helping retirees lower their lifetime tax bills. Connect on X and YouTube at @KurtSupeCPA, or read more on the CFG team page.
