Inheriting an IRA used to come with a fairly generous clock. A niece, an adult child, a favorite nephew: any of them could spread withdrawals across their own life expectancy, sometimes for forty or fifty years, letting the account grow largely untouched. That era ended with the SECURE Act of 2019, and the rules that replaced it have kept shifting ever since, most recently with IRS final regulations published in July 2024 that took effect in 2025. If you inherited a traditional or Roth IRA from someone who died in 2020 or later and you are not their spouse, a minor child, disabled, chronically ill, or close in age to them, you are very likely working against a ten-year deadline right now, and the compliance details matter more than most beneficiaries realize.
This guide walks through exactly how the ten-year rule works today, who actually has to follow it, when annual withdrawals are mandatory versus optional inside that window, and how to build a withdrawal plan that avoids both a tax-bracket collision in year ten and a costly missed-RMD penalty along the way. Nothing here is individualized tax or legal advice. IRA distribution rules interact with your income, state taxes, and family circumstances in ways a general guide cannot fully capture, so treat this as the framework to bring to a CPA or fee-only advisor rather than a substitute for one.
Quick Answer: What the Ten-Year Rule Actually Requires
If you inherited an IRA from someone who died in 2020 or later and you are a “non-eligible” designated beneficiary (most adult children, siblings, friends, and unrelated heirs), the entire account must be fully distributed by December 31 of the tenth year after the year of death, with no extensions and no exceptions for market conditions.
Whether you also owe an RMD in years one through nine depends on one fact: did the original owner die before or after their Required Beginning Date (RBD)? If they died on or after their RBD (age 73 for most owners today), you must take an annual RMD every year of the ten-year window, calculated off your own life expectancy, in addition to emptying the account by year ten. If they died before their RBD, no annual withdrawal is legally required. You can wait until year ten and take it all at once, spread it evenly, or do anything in between.
Inherited Roth IRAs are treated as if the owner died before their RBD in every case, since Roth owners never face lifetime RMDs, so no annual withdrawal is mandatory for a Roth beneficiary. Only the year-ten deadline applies.
The Decision Framework: Four Questions Before You Touch a Dollar
Every inherited-IRA compliance decision traces back to four questions, answered roughly in this order. Get the sequence wrong and you risk either an avoidable tax hit or, worse, a missed mandatory distribution that draws an IRS excise tax.
Question 1: Am I a spouse, an Eligible Designated Beneficiary, or a “regular” designated beneficiary?
The tax code sorts beneficiaries into three tiers, and the tier you land in decides whether the ten-year rule even applies to you.
- Surviving spouse: can roll the IRA into their own name, remain as beneficiary and stretch over their own life expectancy, or (since a SECURE 2.0 provision available starting 2024) elect to be treated as if they were the deceased owner for RMD timing purposes. Spouses are functionally exempt from the ten-year rule in almost every practical scenario.
- Eligible Designated Beneficiary (EDB): a minor child of the account owner (not a grandchild), someone disabled or chronically ill under the tax code’s medical definitions, or an individual who is not more than ten years younger than the deceased. EDBs can choose to stretch distributions over their own single life expectancy instead of using the ten-year rule.
- Everyone else (a “non-eligible” designated beneficiary): adult children, grandchildren, siblings, nieces and nephews, friends, and most trusts. This group is squarely inside the ten-year rule with no life-expectancy alternative.
A minor child of the deceased gets a hybrid treatment worth flagging separately: they use life-expectancy withdrawals until they reach age 21 (the age the final regulations use for this purpose, regardless of a state’s own age of majority), and then the ten-year clock starts running on whatever balance remains.
Question 2: Did the original owner die before or after their Required Beginning Date?
This is the single most consequential fact in the entire compliance picture, and it is easy to get wrong because the RBD age has moved twice in five years. Under SECURE 2.0, the RBD is age 73 for owners who turned 72 in 2023 or later, rising to 75 starting in 2033 for people born in 1960 or after. If the account owner died on or after reaching that age (or, more precisely, on or after the April 1 following the year they turned 73), the final regulations treat the beneficiary’s withdrawal obligation like a continuation of the owner’s own RMD schedule: annual RMDs are mandatory in years one through nine, on top of the year-ten depletion deadline. If the owner died before reaching their RBD, no annual RMD is legally required during the ten-year window at all.
Question 3: Is this a traditional IRA or a Roth IRA?
Because Roth IRA owners are never subject to lifetime RMDs, the “died before RBD” scenario applies automatically to every inherited Roth, no matter how old the original owner was when they died. That means a beneficiary of an inherited Roth IRA never owes an annual RMD during the ten-year window. Only the December 31 of year ten deadline for full depletion applies, and everything that comes out is generally tax-free if the five-year Roth clock had already been satisfied.
Question 4: Given the answers above, what withdrawal pattern minimizes my tax bill and my compliance risk?
This is where the actual strategy lives, and it is the subject of the comparison and worked example below.
Evaluation Criteria: What Should Actually Drive the Withdrawal Pattern
Once you know which bucket you fall into, four criteria should shape how you spread withdrawals across the ten-year window.
- Marginal tax bracket, this year and in likely future years. Every dollar withdrawn from a traditional inherited IRA is ordinary income in the year you take it. A beneficiary in their peak earning years who takes a large lump sum in one bad year can easily push themselves into a higher bracket, lose eligibility for credits, or trigger the 3.8% net investment income surtax on other income.
- Whether annual RMDs are mandatory for your situation. If they are (owner died after RBD), your flexibility is limited to how much you withdraw above the required minimum, not whether you withdraw at all.
- Proximity to other income events. A planned retirement, a sabbatical year, a low-income year after a layoff, or a high-income year from a bonus or business sale should all shift withdrawals toward the years when your bracket is lowest.
- Risk tolerance for the year-ten cliff. Waiting until year ten to withdraw everything concentrates a decade of tax-deferred growth into a single tax return, and market timing means you have zero control over what the account balance looks like on the day you’re forced to liquidate it.
Comparison Table: Withdrawal Strategies Inside the Ten-Year Window
| Strategy | Best fit | Tax pattern | Year-10 cliff risk | Mandatory RMD compatible? |
|---|---|---|---|---|
| Even split (roughly 1/10th of the current balance each year) | Beneficiaries with stable, predictable income across the decade | Smooths bracket exposure; easiest to model | Low | Yes |
| Front-loaded (larger withdrawals in years 1–3, smaller after) | Beneficiaries currently in a low-income year (job loss, school, sabbatical, early career) | Captures a low bracket while it lasts; leaves more room for growth to compound tax-deferred later | Low | Yes |
| Back-loaded / deferred (minimum or zero withdrawals until years 8–10) | Beneficiaries expecting lower income in later years, or wanting maximum tax deferral | Maximizes years of deferred growth but concentrates a decade of gains into one or two tax returns | High | Only if owner died before RBD, or Roth IRA |
| Mandatory RMD + planned drain (annual RMD as floor, plus discretionary extra withdrawals timed to low-bracket years) | Beneficiaries of an owner who died on or after their RBD | RMD sets an income floor every year; discretionary amounts fine-tune the bracket | Moderate (still need a plan for the leftover balance in year 10) | Required |
Visualizing the Trade-Off: Even Split vs. Back-Loaded Withdrawals
The chart below illustrates why deferring withdrawals is riskier than it looks. It shows the share of the original inherited balance withdrawn in selected years under two approaches: an even split (roughly 10% each year) and a back-loaded approach that defers most of the balance to the final year. The dashed line marks the 10% level an even split holds to every year; notice how far the back-loaded bars swing away from it, especially at year 10.
10%
2%
10%
6%
10%
14%
10%
58%
Worked Example: A 58-Year-Old Beneficiary Plans a Decade of Withdrawals
Consider Maria, who inherits a $420,000 traditional IRA from her father in 2026. Her father died at age 76, three years after his RBD, so Maria is a non-eligible designated beneficiary of an owner who died after the RBD. Two obligations now apply simultaneously: an annual RMD calculated off her own single life expectancy, and a hard deadline to zero out the account by December 31, 2036.
To find her first-year RMD, Maria uses the IRS Single Life Expectancy Table with her age in the year following her father’s death (59). The table produces a divisor in that range, and she divides the December 31, 2026 account balance by that number to get her 2027 RMD. In each subsequent year, she does not look the divisor back up on the table. She simply subtracts one from the prior year’s divisor and divides the new balance by that smaller number, which mechanically forces withdrawals to grow as a percentage of the account each year. This is often called the “reduce by one” method, and it’s the standard approach the final regulations preserve for beneficiaries who inherited before 2025 as well as those inheriting under the current rules.
Maria’s RMD in year one covers only a few percent of the balance. Left purely to the RMD schedule, the math would still leave a substantial sum sitting in the account heading into year ten, which is not allowed. The account must reach zero by then regardless of what the RMD formula produces. So Maria layers a second, discretionary withdrawal on top of her RMD in the years she expects to be in a lower bracket: the year she cuts back to part-time work before her own retirement, for instance. By year eight or nine, she has already worked the balance down enough that the final one or two withdrawals are manageable rather than a shock. The RMD is her floor every year; her own income planning decides how much, if anything, she takes above it.
Now compare that to her brother, who inherits an identical account from the same parent but chooses to take only the bare minimum RMD every year, assuming he can “figure out year ten later.” Because his RMDs represent a shrinking fraction of a growing account balance early on, roughly half of the original balance is still sitting in the IRA heading into year nine. He is now forced to liquidate a large sum in one or two tax years, right as he’s also drawing his own salary, and the combined income pushes a meaningful slice of that withdrawal into a much higher marginal bracket than if he had spread it out.
Common Mistakes That Trigger Penalties or Unnecessary Tax
Assuming “no RMD required” applies to everyone
The most frequent error is treating the ten-year rule as a single, simple rule: wait ten years, take it all out. That was briefly true under the earlier proposed reading of the SECURE Act, but the July 2024 final regulations settled the question: if the original owner died on or after their RBD, annual RMDs are mandatory throughout the ten-year window, not optional.
Ignoring the transition-relief years
Because the final rule wasn’t settled until mid-2024, the IRS issued penalty relief for missed annual RMDs on inherited accounts for tax years 2021 through 2024 (through a series of notices). That relief does not extend indefinitely: for 2025 and beyond, beneficiaries subject to the annual-RMD requirement are expected to take them, and missing one now carries real exposure.
Missing an RMD and not correcting it quickly
SECURE 2.0 cut the excise tax for a missed RMD from 50% to 25% of the shortfall, and that penalty drops further to 10% if the shortfall is corrected within the IRS’s correction window (generally within two years, by withdrawing the missed amount and filing Form 5329). Beneficiaries who realize mid-year that they skipped a required distribution should fix it immediately rather than waiting for the next filing season.
Recalculating the life-expectancy divisor every year
Some beneficiaries mistakenly look up a fresh divisor from the IRS table each year based on their current age. The correct method for most designated beneficiaries is to use the divisor from the year following death exactly once, then subtract one from it in every subsequent year, not to re-reference the table. Getting this wrong can understate or overstate the RMD for years at a stretch.
Confusing the ten-year deadline with a ten-year stretch
The ten-year rule is not a new version of the old stretch IRA. There is no requirement to spread withdrawals evenly (unless an annual RMD applies as a floor), but there is an absolute requirement to reach zero by year ten. Treating it as a leisurely stretch and deferring everything is what creates the tax-bracket collision described above.
Overlooking what happens to a successor beneficiary
If the person who inherited the IRA under the ten-year rule dies before the ten years are up, whoever inherits from them (a “successor beneficiary”) generally must continue distributing what’s left on the original ten-year schedule; they don’t restart a fresh clock of their own. Coordinating this with your own estate plan matters if you’re the current beneficiary and want your heirs to understand the deadline they’re stepping into.
Forgetting that Roth and traditional dollars behave differently inside the same rule
Because the year-ten deadline applies to both, it’s easy to assume the tax treatment is similar. It isn’t: every dollar out of an inherited traditional IRA is ordinary income, while qualified withdrawals from an inherited Roth IRA are tax-free. A beneficiary who inherits both from the same parent should generally prioritize letting the Roth ride as long as possible while managing the traditional account’s bracket exposure more actively.
Practical Compliance Checklist
- Confirm your beneficiary classification: spouse, EDB, or non-eligible designated beneficiary. Get this in writing from the plan custodian if you’re unsure.
- Determine the deceased owner’s age and date of death relative to their Required Beginning Date. Ask the custodian for the owner’s date of birth and any RMD history if you don’t have it.
- Note the exact December 31 deadline for full depletion: the tenth year after the year of death, not ten years from the date of death.
- If an annual RMD applies, calculate the first-year divisor from the IRS Single Life Expectancy Table using your age in the year after death, then commit to the “reduce by one” method for every year after.
- Build a ten-year withdrawal projection that layers any mandatory RMD against your own income forecast, flagging years where a discretionary extra withdrawal would land in a lower bracket.
- Set a recurring reminder well before December 31 each year. Missed deadlines are the single most avoidable cause of an excise tax.
- If you discover a missed RMD from a prior year, correct it immediately and file Form 5329 to claim the reduced 10% penalty rate rather than waiting.
- Revisit the plan any year your income changes materially (job loss, retirement, inheritance from another source, business sale).
- If you hold both a traditional and a Roth inherited IRA from the same person, plan them separately. Don’t let the traditional account’s tax exposure dictate how you treat the Roth.
Key Takeaways
- Most non-spouse, non-disabled adult beneficiaries who inherited an IRA from someone who died in 2020 or later must fully deplete the account by December 31 of the tenth year after death.
- Whether annual RMDs are also mandatory during that ten-year window depends on whether the original owner died before or after their Required Beginning Date, currently age 73 for most owners.
- Inherited Roth IRAs never carry a mandatory annual RMD, only the year-ten depletion deadline, because Roth owners are never subject to lifetime RMDs themselves.
- The 2024 final regulations ended years of ambiguity; penalty relief for missed annual RMDs generally does not extend past 2024.
- A missed RMD now carries a 25% excise tax on the shortfall, reduced to 10% if corrected within the IRS’s correction window.
- Deferring withdrawals to the final years maximizes tax-deferred growth but concentrates risk into one or two tax returns right at the deadline. An even or front-loaded approach usually manages bracket exposure more predictably.
Frequently Asked Questions
Does the ten-year rule require me to take money out every single year?
Only if the original account owner died on or after their Required Beginning Date. In that case, annual RMDs are mandatory throughout the ten-year window under the 2024 final regulations. If the owner died before their Required Beginning Date, or if the account is a Roth IRA, no annual withdrawal is legally required; you only need to have the account fully distributed by December 31 of the tenth year after death.
What is the Required Beginning Date and why does it matter so much?
The Required Beginning Date is the date a traditional IRA owner must start taking their own required minimum distributions, generally April 1 of the year after they turn 73 under current law. It matters because the final regulations use it as the dividing line for beneficiaries: if the owner died on or after that date, beneficiaries subject to the ten-year rule must also take annual RMDs; if the owner died before that date, they don’t have to.
Who qualifies as an Eligible Designated Beneficiary and skips the ten-year rule?
Eligible Designated Beneficiaries include the surviving spouse, a minor child of the account owner (until they reach age 21), an individual who is disabled or chronically ill under the tax code’s definitions, and anyone not more than ten years younger than the deceased owner. These beneficiaries can generally stretch withdrawals over their own single life expectancy instead of following the ten-year rule.
What happens if I miss a required annual distribution from an inherited IRA?
The shortfall is subject to an excise tax under the tax code, reduced by SECURE 2.0 from 50% to 25% of the amount that should have been withdrawn. That penalty can drop further to 10% if you correct the missed distribution within the IRS’s correction window, generally by withdrawing the shortfall and filing Form 5329.
Do inherited Roth IRAs work the same way as inherited traditional IRAs under the ten-year rule?
The depletion deadline is the same December 31 of the tenth year after death for both account types. The difference is that Roth IRA owners never have lifetime RMDs, so every inherited Roth is automatically treated as if the owner died before their Required Beginning Date, meaning no annual RMD is required, only the final deadline, and qualified withdrawals come out tax-free.
Can I just wait until year ten and withdraw everything at once?
Only if no annual RMD is required in your situation (owner died before RBD, or it’s a Roth IRA). Even then, waiting until the last year concentrates a decade of growth into a single tax return, which can push a large share of the withdrawal into a much higher bracket than spreading it across several years would.
What if the beneficiary who inherited the IRA dies before the ten years are up?
Whoever inherits from that beneficiary (a successor beneficiary) generally must continue distributing the remaining balance on the same original ten-year schedule rather than starting a new period of their own, though the exact mechanics can vary depending on whether the first beneficiary was taking life-expectancy payments as an Eligible Designated Beneficiary.
References
- Internal Revenue Service, “Retirement Topics: Required Minimum Distributions (RMDs),” IRS.gov.
- Internal Revenue Service, “Retirement Topics: Beneficiary,” IRS.gov.
- U.S. Department of the Treasury and Internal Revenue Service, “Required Minimum Distributions” final rule, Federal Register, July 19, 2024.
- Internal Revenue Service, Notice 2024-35, “Certain Required Minimum Distributions for 2024.”
- Internal Revenue Service, Publication 590-B, “Distributions from Individual Retirement Arrangements (IRAs).”
- For related reading on choosing who inherits a traditional IRA and how beneficiary classification shapes these timelines, see our guide to naming beneficiaries on a Traditional IRA.
