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.
Important: This is a planning decision, not just a withdrawal deadline. The timing of inherited IRA withdrawals can affect your tax bracket, Medicare premiums, Social Security taxation, and other parts of your retirement plan.
Inherited IRA rules can vary depending on your relationship to the original account owner, when they passed away, and whether you're inheriting a traditional or Roth IRA. For a more comprehensive explanation of these rules and the planning decisions involved, read our
complete guide to inherited IRA rules.
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
Two common versions of the inherited IRA 10-year rule and their planning implications
| Scenario |
What May Be Required |
Common Planning Impact |
| Version 1: Owner had not started RMDs |
Empty the account by the end of year 10. Distributions can be taken at any pace, including waiting until year 10. |
Waiting can create a large taxable spike in year 10 for inherited traditional IRAs. |
| Version 2: Owner had started RMDs |
You may need annual distributions in years 1 through 9 and still empty the account by the end of year 10. |
Missing required annual distributions can create penalty risk and may reduce flexibility. |
Why This Matters: A Simple Example
Imagine inheriting a $600,000 traditional IRA.
If you wait until year 10 and withdraw the full balance in one year, that income could push you into a significantly higher tax bracket.
Instead, spreading withdrawals over multiple years may allow you to stay in lower brackets and reduce total lifetime taxes.
Example: Taking $600,000 in one year could create a large spike in taxable income. Taking $60,000 per year over 10 years may help smooth the tax impact depending on your income and tax bracket.
Comparison of inherited IRA withdrawal strategies and potential tax impact
| Withdrawal Strategy |
What Happens |
Potential Impact |
| Wait until year 10 |
Withdraw the full balance in one year |
May create a large tax spike and push you into higher tax brackets |
| Even distributions |
Withdraw similar amounts each year |
May help smooth income and reduce tax volatility |
| Strategic timing |
Adjust withdrawals based on income each year |
May improve overall tax efficiency depending on your situation |
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.
Frequently Asked Questions
Do I really have to empty an inherited IRA within 10 years?
Many non-spouse beneficiaries who inherit after 2019 are required to empty the account by the end of year 10. The exact requirements depend on beneficiary type and the account owner’s status at death.
Are annual distributions required during the 10 years?
In some cases, yes. If the original owner had already started RMDs, you may be required to take annual distributions in years 1 through 9, in addition to emptying the account by year 10.
Can I wait until year 10 to withdraw everything?
In some situations, yes. But waiting can create a large taxable income spike in year 10 and may not be the most tax-efficient approach for inherited traditional IRAs.
What happens if I miss a required inherited IRA distribution?
Missing a required distribution can create penalty risk and may complicate your tax planning. That is why it is important to understand which version of the 10-year rule applies to you.
Does the 10-year rule apply to inherited Roth IRAs?
Often, yes, for many non-spouse beneficiaries. The main difference is that qualified Roth withdrawals are typically tax-free, which can create more flexibility.
How should I decide when to take inherited IRA withdrawals?
The best approach depends on your income, tax bracket, retirement timeline, and whether the inherited IRA is traditional or Roth. Coordinating withdrawals thoughtfully may help reduce unnecessary taxes over time.
Want Help Coordinating This With Your Retirement Plan?
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