Inherited IRA 10-Year Rule Explained

What Is the Inherited IRA 10-Year Rule?

The inherited IRA 10-year rule generally requires many non-spouse beneficiaries who inherit an IRA after 2019 to empty the account by the end of the 10th year after the original owner’s death. In some cases, annual distributions may also be required during years 1 through 9. The correct approach depends on whether the original owner had started taking required minimum distributions (RMDs) and on your tax situation.

Who Does the 10-Year Rule Apply To?

The 10-year rule generally applies to many non-spouse beneficiaries, including adult children, grandchildren, and most other non-spouse heirs. Spouses often have more flexibility.

The Two Versions of the 10-Year Rule

Why This Matters: A Simple Example

If you inherit a $600,000 traditional IRA and wait until year 10 to withdraw everything, you could push yourself into a higher tax bracket. Spreading withdrawals more evenly can sometimes help smooth the tax impact. The right strategy depends on your income, tax bracket, retirement timeline, and whether the inherited IRA is traditional or Roth.

How Are Inherited Roth IRAs Treated?

Inherited Roth IRAs generally still fall under the 10-year rule for many non-spouse beneficiaries. The difference is that qualified withdrawals are typically tax-free, which can create more planning flexibility. In some situations, it can make sense to let the Roth grow for most of the 10-year period. In others, strategic withdrawals may still be appropriate.