Inherited IRA Rules: The 10-Year Withdrawal Trap
Who has to follow which rule
| Beneficiary type | Withdrawal rule |
|---|---|
| Surviving spouse | Can treat the IRA as their own or stay a beneficiary, and may stretch withdrawals over their own life expectancy. Not subject to the 10-year rule. |
| Eligible designated beneficiary (minor child of owner, disabled/chronically ill, or heir not more than 10 years younger) | Exempt from the 10-year rule. May still stretch withdrawals over life expectancy. |
| Most non-spouse heirs (adult children, grandchildren, other relatives, friends) | Must empty the account by year 10. If the owner had already started RMDs, must also take annual withdrawals in years 1 to 9. |
Rules are general and depend on the owner's date of death, their RMD status, and the beneficiary's category. Confirm your specific situation before acting. The yearly amount in years 1 to 9 applies when the owner died on or after their required beginning date (April 1 of the year after they reached RMD age). The IRS waived the penalty for missing it for 2021 to 2024 and enforces it from 2025.
Sources: IRS, RMDs for IRA beneficiaries; IRS Publication 590-B; IRS RMD FAQs. Checked October 10, 2026.
Also see: Social Security's Date Rules
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Why lump-summing in year 10 is often the worst move
It's tempting to leave the money untouched and pull it all out at the deadline. The problem: every dollar of a traditional inherited IRA is taxed as ordinary income in the year you withdraw it. Cramming ten years of withdrawals into one tax year can push a heir from the 22% bracket into the 32% or 35% bracket, trigger higher Medicare (IRMAA) premiums, and phase out other tax benefits. Spreading roughly equal withdrawals across all ten years keeps each year's income lower and usually results in a smaller total tax bill over the decade.
Coordinating with the heir's own income
The "right" pace isn't purely mathematical. It depends on what else is on your tax return. An heir who is still working in their peak earning years may want to take smaller withdrawals now and larger ones after they retire into a lower bracket. An heir already retired might front-load withdrawals in low-income years before Social Security and their own RMDs begin. The goal is to fill up the lower tax brackets each year without spilling into a higher one, all while still emptying the account by the deadline.
The stretch IRA is gone for most heirs
Before 2020, a child who inherited an IRA could "stretch" withdrawals over their own life expectancy. A 50-year-old heir could take small, mostly painless amounts for more than 30 years while the rest kept growing. The SECURE Act of 2019 ended that for most heirs of owners who die after December 31, 2019 (IRS Publication 590-B, checked October 14, 2026). The 10-year rule calculator shows your own deadline and yearly minimum.
| Owner died | Typical adult child must | What it does to the tax |
|---|---|---|
| Before 2020 (the old stretch) | Take a yearly amount based on the child's own life expectancy | Small yearly tax bills spread over decades |
| 2020 or later (the 10-year rule) | Empty the whole account by December 31 of the 10th year after the death | A lifetime of savings taxed inside 10 years, often during the heir's highest-earning years |
Spouses, minor children of the owner, disabled or chronically ill heirs, and heirs not more than 10 years younger than the owner can still stretch (see the table at the top of this page).
Died before or after the required beginning date: two different 10-year rules
The 10-year deadline is the same either way. What changes is whether the heir must also take money out every year along the way. The dividing line is the owner's required beginning date: April 1 of the year after the owner reaches RMD age (73 for people born 1951 to 1959, 75 for 1960 or later).
| If the owner died | Years 1 to 9 | Year 10 |
|---|---|---|
| Before the required beginning date | No yearly withdrawal required | Account must be empty by December 31 |
| On or after the required beginning date | A yearly required withdrawal, based on the longer of the heir's single life expectancy or the owner's | Account must be empty by December 31 |
The second row is the one that catches families. If the heir is near retirement themselves, those forced yearly withdrawals land on top of their own income and can make more of their own Social Security taxable and raise their own Medicare premiums two years later.
The grace-period trap: yearly withdrawals are enforced from 2025
After the SECURE Act, many heirs did not know about the yearly withdrawals in the second row. The IRS waived the excise tax for missed yearly amounts in 2021, 2022, 2023 and 2024 (IRS Notices 2022-53, 2023-54 and 2024-35). The final regulations published in July 2024 ended that relief: starting in 2025 the yearly amount is required, and a missed one carries the 25% excise tax, cut to 10% if it is corrected in time (IRS Publication 590-B, checked October 14, 2026).
A hypothetical example. Lisa's father died in 2021 at 78, after his required beginning date. Lisa was 50 and took nothing out in 2022 through 2024, which the waivers allowed. On December 31, 2024 the inherited IRA held $700,000.
| Step | Number |
|---|---|
| Lisa's age in 2022, the year after the death | 51 |
| IRS Single Life Table factor at 51 | 35.3 |
| Factor for 2025 (minus 1 for each year since 2022) | 32.3 |
| Required 2025 withdrawal ($700,000 ÷ 32.3) | $21,672 |
| Excise tax if she misses it (25%) | $5,418 |
| Excise tax if corrected in time (10%) | $2,167 |
| Deadline to empty the account | Dec 31, 2031 |
Waiting cost Lisa nothing in penalties, but it cost her time. The $700,000 now has to come out over 7 tax years (2025 to 2031) instead of 10, roughly $100,000 a year before growth instead of about $70,000. Every one of those dollars is taxed as ordinary income on top of her salary. That is the compressed timeline the 10-year rule creates.
Who should look at this now
Owners with $500,000 or more in pre-tax accounts (IRA, 401(k), 403(b)) who plan to leave them to children or other non-spouse heirs, and heirs who inherited after 2019 and have not taken anything yet. For the owner's side of the planning, see leaving an IRA to your children. To find a yearly amount, use the inherited IRA RMD calculator.
What the 10-year rule costs you
Two inputs. It compares spreading withdrawals evenly against waiting until year ten, which is the mistake that costs the most.
| Your income while spreading | $0 |
| Your income if you wait for year 10 | $0 |
| Top bracket you would hit by spreading it out | n/a |
| Top bracket you would hit by waiting | n/a |
Rough guide. Uses the 2026 single-filer bracket lines (IRS 2026 inflation adjustments) on your total income, before the standard deduction. Your real bracket may be lower.
We will email you a written breakdown showing what to withdraw each year, when the annual requirement applies, and how to use your lower-income years. Free, and yours to forward to whoever does your taxes.
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These numbers change every year
The IRMAA brackets, the standard deduction and the senior deduction are all adjusted annually, and the 2027 figures are published late in 2026. The one exception is the Social Security taxation thresholds, which have not moved since 1983 and are not expected to.
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See your inherited IRA drawdown, year by year
Enter the balance, your other income, and your timeline. Our free calculator shows the withdrawal schedule that spreads the tax hit and keeps you on pace for the 10-year deadline.
Plan my inherited IRA →Frequently asked questions
What is the inherited IRA 10-year rule?
Under the SECURE Act, most non-spouse heirs must withdraw the entire inherited IRA by December 31 of the 10th year after the owner's death. The old lifetime "stretch IRA" that let heirs spread withdrawals over their own life expectancy no longer applies to most beneficiaries.
Do I have to take annual withdrawals during the 10 years?
It depends on the owner's RMD status. If the original owner had already started required minimum distributions before death, most non-spouse heirs must take annual withdrawals in years 1 to 9 and empty the account by year 10. If the owner died before their RMD start age, no annual withdrawals are required, only the full balance by year 10.
Who is exempt from the 10-year rule?
Eligible designated beneficiaries can still stretch withdrawals over their life expectancy. This includes surviving spouses, minor children of the owner (until age 21, when the 10-year clock starts), disabled or chronically ill individuals, and beneficiaries not more than 10 years younger than the owner.
Did the IRS waive inherited IRA RMDs for 2025?
No. The IRS waived the excise tax on missed yearly inherited IRA withdrawals for 2021 through 2024. Starting in 2025, heirs of owners who died on or after their required beginning date must take the yearly amount, and a missed one can cost 25% of the shortfall, or 10% if corrected in time.
Is the stretch IRA completely gone?
Not for everyone. Surviving spouses, minor children of the owner (until 21), disabled or chronically ill heirs and heirs not more than 10 years younger than the owner can still stretch withdrawals over their life expectancy, and heirs of owners who died before 2020 keep the old rules. Most adult children of owners who died in 2020 or later follow the 10-year rule.
Want to run these numbers for your own situation?
The Retirement Literacy Foundation runs free retirement classes across Southern California on Social Security timing, taxes in retirement, and how to turn savings into income. No products are sold at our classes.
The Retirement Literacy Foundation is a 501(c)(3) non-profit. This guide is general financial education, not individualized investment, tax, or insurance advice. Rules are illustrative and change with legislation and IRS guidance, and depend on your personal situation. Consider speaking with a licensed professional before making decisions.
Hans Goldstein, EA
Founder & Executive Director · Retirement Literacy Foundation, a 501(c)(3) non-profit
Admitted to practice before the IRS
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See also: Check your deadline and this year's minimum in the inherited IRA RMD calculator, including inherited Roth IRAs.