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Inherited IRAs and the SECURE Act's 10-Year Rule

By Bob Lobclaw · August 2, 2026

Inheriting an IRA used to come with a valuable option: stretch withdrawals over your own life expectancy, sometimes for decades, letting most of the balance keep growing tax-deferred (or tax-free, for a Roth) the whole time. The SECURE Act eliminated that option for most beneficiaries starting in 2020, replacing it with a hard 10-year deadline — and it took the IRS until 2024 to finalize exactly how withdrawals inside that decade are supposed to work.

What the “stretch IRA” used to allow

Before 2020, a non-spouse beneficiary — a child inheriting a parent’s IRA, for example — could take required minimum distributions based on their own life expectancy rather than the original owner’s. A 40-year-old beneficiary might stretch withdrawals over 40+ years, keeping the bulk of the account compounding tax-advantaged for decades. The SECURE Act, passed in December 2019, ended this for deaths occurring in 2020 or later, for most beneficiaries.

The 10-year rule, and who’s exempt from it

Most non-spouse beneficiaries must now fully empty an inherited IRA by December 31 of the tenth year after the original owner’s death — no more life-expectancy stretch. A category of “eligible designated beneficiaries” (EDBs) is exempt from the 10-year rule and can still stretch withdrawals over their own life expectancy:

  • Surviving spouses, who also have the separate option of rolling the account into their own IRA.
  • Minor children of the original owner — but only until they reach the age of majority, at which point the 10-year clock starts.
  • Disabled or chronically ill individuals, as defined by IRS rules.
  • Beneficiaries not more than 10 years younger than the original owner, such as a sibling close in age.

Everyone else — adult children, most other relatives, friends, most trusts — falls under the flat 10-year rule.

The final regulations: annual RMDs inside the 10 years

For years after the SECURE Act passed, it was unclear whether beneficiaries subject to the 10-year rule also had to take an RMD in each of those 10 years, or could simply wait and empty the account all at once in year 10. The IRS proposed annual RMDs in 2022, then waived the penalty for missing them through 2024 while the rule stayed unsettled. Final regulations, issued in July 2024 and effective for 2025, resolved it by splitting beneficiaries into two cases based on the original owner’s age at death:

  • Owner died on or after their RMD required beginning date (i.e., they had already started taking RMDs). The beneficiary must take annual RMDs, based on their own life expectancy, in years 1 through 9, and empty whatever remains by the end of year 10.
  • Owner died before their RMD required beginning date. No annual RMDs are required at all — the beneficiary can leave the account untouched for nine years and withdraw everything in year 10, take it out evenly, or take it out unevenly, as long as the account is empty by the deadline.

Inherited Roth IRAs fall into the second case regardless of the owner’s age at death, because Roth IRAs have no required beginning date for the original owner — so beneficiaries of an inherited Roth never owe annual RMDs, only the full 10-year payout, and every year of additional deferral is tax-free growth rather than tax-deferred growth. See the RMDs explained article for how required beginning dates and RMD calculations work for original account owners.

Missing a required annual distribution carries a 25% excise tax on the shortfall, reduced from 50% by SECURE 2.0 in 2023 — and it drops further, to 10%, if the missed distribution is corrected within two years.

Planning around the 10-year window

Because the account must be fully distributed within a fixed decade, the real planning question is when inside that window to take the money, not whether to take it. Withdrawals count as ordinary taxable income (for a traditional IRA), so bunching large distributions into years with otherwise low income — a gap year between jobs, an early-retirement year before Social Security and RMDs begin — can keep more of the withdrawal in lower tax brackets than emptying the account all at once in year 10. Spreading withdrawals evenly across all 10 years is the simplest approach and avoids a single large bracket-jumping year at the deadline, at the cost of losing some flexibility to time around other income.

The bottom line

The stretch IRA is gone for most non-spouse beneficiaries, replaced by a 10-year deadline that, as of the 2024 final regulations, sometimes requires annual withdrawals along the way and sometimes doesn’t — depending entirely on whether the original owner had already started their own RMDs. Getting this wrong risks a 25% penalty on a missed distribution; getting the timing right is mostly about managing which tax bracket each withdrawal lands in. See the estate planning page for how inherited-account rules fit into broader estate and beneficiary planning.

Educational content, not personalized financial advice — see the disclaimer.