What is the 10-year rule for inherited IRAs?

Under the SECURE Act, most non-spouse beneficiaries who inherit an IRA after 2019 must withdraw the entire balance within 10 years of the original owner's death. If the original owner had already started RMDs, annual distributions are required during the 10 years.

Do I have to pay taxes on an inherited IRA?

If you inherit a Traditional IRA, withdrawals are taxed as ordinary income (just as they would have been for the original owner). Inherited Roth IRAs are generally tax-free if the account met the 5-year holding period. Either way, the 10% early withdrawal penalty does not apply to inherited accounts, regardless of your age.

Can a surviving spouse roll over an inherited IRA into their own IRA?

Yes. Spousal beneficiaries have the unique option to roll the inherited IRA into their own IRA, treating it as if it were always theirs. This resets the RMD schedule to the spouse's own age and eliminates the 10-year rule requirement.

What happens if I miss the 10-year deadline for an inherited IRA?

If you fail to withdraw the full balance by December 31 of the 10th year after the owner's death, the remaining amount may be subject to a 25% excise tax (reduced to 10% if corrected within 2 years under SECURE 2.0).

retirement Audience: general 6 min read

Inherited IRA Rules: The 10-Year Rule and Your Options

Rules for inherited IRAs after the SECURE Act — the 10-year distribution rule, eligible beneficiary exceptions, and tax-smart strategies.

Last updated on March 20, 2026

Inheriting a retirement account used to be straightforward — stretch distributions over your lifetime. The SECURE Act of 2019 changed the rules dramatically for most beneficiaries, and SECURE 2.0 made further adjustments. This guide explains your options depending on when you inherited and your relationship to the original owner.

Key Takeaways

Most non-spouse beneficiaries must empty an inherited IRA within 10 years (SECURE Act).
Surviving spouses can roll the IRA into their own account — the best option for most.
Eligible designated beneficiaries (minor children, disabled, chronically ill, close-in-age) can still stretch.
Inherited Roth IRAs follow the 10-year rule but withdrawals are tax-free.
No 10% early withdrawal penalty applies to inherited IRA distributions at any age.

Pre-SECURE Act vs Post-SECURE Act

Rule	Inherited Before 2020	Inherited 2020 or Later
Non-spouse beneficiary	Stretch over beneficiary's life expectancy	10-year rule (full balance by year 10)
Surviving spouse	Roll over or stretch	Roll over or stretch (unchanged)
Minor child	Stretch until age of majority	Stretch until majority, then 10-year clock starts
Disabled/chronically ill	Stretch	Stretch (still allowed)

If you inherited an IRA before January 1, 2020, the old “stretch IRA” rules still apply to your account. The 10-year rule only affects accounts inherited on or after that date.

The 10-Year Rule Explained

For most non-spouse beneficiaries who inherit after 2019:

You must withdraw the entire account balance by December 31 of the 10th year after the owner’s death.
If the original owner died before their RMD beginning date (generally before April 1 of the year after turning 73): No annual RMDs are required during the 10 years. You can withdraw on any schedule as long as the account is empty by year 10.
If the original owner died on or after their RMD beginning date: Annual RMDs are required during the 10-year period, based on your life expectancy, with the remaining balance due by year 10.

This distinction — whether the original owner had started RMDs — is critical and was clarified by final IRS regulations in 2024.

Beneficiary Categories

Surviving Spouse (Most Flexible)

A surviving spouse has multiple options:

Roll over into your own IRA. Treat it as your own account. RMDs are based on your age. This is usually the best option for spouses under 73. You can roll the inherited IRA into your own Traditional IRA or even convert it to a Roth IRA.
Remain as beneficiary. Keep it as an inherited IRA. Useful if you are under 59½ and need access without the 10% early withdrawal penalty.
10-year rule. You can elect this, but it rarely makes sense for spouses.

Eligible Designated Beneficiaries (Can Still Stretch)

These beneficiaries are exempt from the 10-year rule and can stretch distributions over their life expectancy:

Minor children of the deceased (not grandchildren) — until they reach the age of majority (21 for IRS purposes), then the 10-year clock starts.
Disabled individuals (as defined by IRS).
Chronically ill individuals.
Individuals not more than 10 years younger than the deceased.

Non-Eligible Designated Beneficiaries (10-Year Rule)

Everyone else — adult children, grandchildren, siblings, friends, most trust beneficiaries — falls under the 10-year rule.

Non-Designated Beneficiaries (No Stretch, No 10-Year)

Estates, charities, and certain trusts that do not qualify as “see-through” trusts must distribute under the old 5-year rule (if the owner died before RMD age) or the remaining life expectancy of the decedent.

Tax-Smart Strategies for the 10-Year Rule

The 10-year rule gives you flexibility in when during those 10 years you take distributions (assuming no annual RMD requirement). Smart planning can significantly reduce your total tax:

Spread withdrawals evenly. Instead of waiting until year 10 (which creates a massive income spike), take roughly equal distributions each year to stay in a lower tax bracket.
Accelerate in low-income years. If you experience a job loss, sabbatical, or partial retirement, use those lower-income years to withdraw more from the inherited IRA at lower rates.
Coordinate with Roth conversions. If you also have your own Traditional IRA, coordinate inherited IRA withdrawals with your own Roth conversion strategy to optimize bracket utilization. The Roth conversion ladder strategy can work well here.
Inherited Roth IRAs: Delay if possible. Inherited Roth IRAs also follow the 10-year rule, but withdrawals are tax-free. Let the Roth grow as long as possible and withdraw near the end of the 10-year window.
Consider asset location. As you withdraw from the inherited IRA, think about where to reinvest the proceeds. Our asset location guide and tax diversification guide can help you decide between taxable and tax-advantaged accounts.

Inherited 401(k) Rules

The same SECURE Act rules apply to inherited 401(k) accounts. However, you generally have fewer distribution options while the money remains in the employer plan. Most beneficiaries choose to roll the inherited 401(k) into an inherited IRA for more flexibility. For more on how 401(k) withdrawals are taxed, see our dedicated guide.

Exception: If the original owner had Net Unrealized Appreciation (NUA) in employer stock within the 401(k), it may be worth taking a lump-sum distribution to capture the NUA tax benefit before rolling the remainder to an inherited IRA.

How sharper.tax Helps

sharper.tax analyzes your overall income and tax situation to recommend an optimal withdrawal schedule for inherited accounts. We model the tax impact of different distribution timing strategies across the 10-year window so you can minimize the total tax cost. For related planning topics, explore our guides on retirement tax planning, taxes on retirement withdrawals, and the step-up in basis at death (which does not apply to IRAs but matters for other inherited assets). Sophisticated tax planning used to require a high-end CPA — we make it available for free.

Sources

The information above is educational and not tax advice.