Inherited IRA RMD Rules: The 10-Year Rule and Beneficiary Options Explained

How the SECURE Act Changed Inherited IRA Rules

Before the SECURE Act of 2019, non-spouse beneficiaries who inherited an IRA could "stretch" distributions over their own life expectancy. A 30-year-old inheriting a $500,000 IRA could take small annual distributions over roughly 50 years, allowing the remaining balance to grow tax-deferred. This strategy was widely used in estate planning.

The SECURE Act, effective for deaths occurring on or after January 1, 2020, eliminated the lifetime stretch for most non-spouse beneficiaries and replaced it with the 10-year rule. SECURE 2.0, signed in December 2022, kept the 10-year framework and made additional changes to RMD starting ages, penalties, and certain beneficiary categories.

The transition was not smooth. The IRS issued proposed regulations in February 2022 that surprised many by requiring annual distributions within the 10-year window (when the original owner died after the Required Beginning Date). After issuing relief notices for 2021 through 2024 (IRS Notices 2022-53, 2023-54, and 2024-35), the IRS finalized the regulations on July 18, 2024, with enforcement beginning January 1, 2025.

For a complete overview of how RMDs work for original account owners, including the Uniform Lifetime Table and SECURE 2.0 age changes, see our RMD Rules 2026 and SECURE 2.0 guide.

The 10-Year Rule for Inherited IRAs

The 10-year rule is the default distribution requirement for most non-spouse beneficiaries who inherit an IRA from someone who died on or after January 1, 2020. The core requirement is that the entire inherited IRA balance must be distributed by December 31 of the 10th calendar year following the year of the account owner's death.

When Annual RMDs Are Required (vs. When They Are Not)

Whether you must take annual distributions during the 10-year window depends on when the original owner died relative to their Required Beginning Date (RBD):

The Required Beginning Date is generally April 1 of the year after the owner turns 73 (for those born 1951-1959) or 75 (for those born 1960 or later).

How to Calculate Annual RMDs Under the 10-Year Rule

When annual RMDs are required, you calculate them using the IRS Single Life Expectancy Table (Table I in IRS Publication 590-B). Here is how it works:

1. Find your life expectancy factor: Look up your age as of December 31 of the year following the owner's death in the Single Life Expectancy Table
2. Divide the prior year-end balance: Divide the inherited IRA balance as of December 31 of the prior year by the life expectancy factor
3. Reduce by 1.0 each subsequent year: In each following year, subtract 1.0 from the original life expectancy factor and divide by the new factor

When the owner died before the RBD, you have full flexibility in how you distribute during the 10 years. You could take nothing for 9 years and withdraw it all in year 10, take equal distributions each year, or any combination -- as long as the account is empty by the deadline.

Eligible Designated Beneficiaries: Who Can Still Stretch

The SECURE Act carved out five categories of eligible designated beneficiaries (EDBs) who are exempt from the 10-year rule. These beneficiaries can still stretch distributions over their own life expectancy, preserving the tax-deferred growth potential of the inherited account.

EDB status is determined at the time of the account owner's death and generally does not change. For example, a beneficiary who is disabled at the time of inheritance remains an EDB even if their condition later improves.

Surviving Spouse Beneficiary Options

Surviving spouses have the most flexibility of any beneficiary type. The right choice depends on your age, income needs, and whether you need to access the funds before age 59-1/2.

Option 1: Roll Over to Your Own IRA

This is the most common choice for surviving spouses who do not need immediate access to the funds. By rolling the inherited IRA into your own Traditional IRA:

• RMDs do not begin until you reach age 73 or 75 (depending on your birth year)
• You use the Uniform Lifetime Table rather than the Single Life Expectancy Table, resulting in smaller annual RMDs
• You can name your own beneficiaries
• You can perform Roth conversions on the funds

Drawback: Withdrawals before age 59-1/2 are subject to the 10% early withdrawal penalty.

Option 2: Remain as Beneficiary of the Inherited IRA

This option is often better for younger surviving spouses who may need to access the funds before age 59-1/2:

• Distributions are not subject to the 10% early withdrawal penalty, regardless of your age
• RMDs are calculated using the Single Life Expectancy Table, recalculated annually
• Under SECURE 2.0, RMDs do not begin until the later of: the year the deceased spouse would have turned 73 (or 75), or the year following the death

Option 3: Elect the 10-Year Rule

A surviving spouse can voluntarily elect the 10-year rule. This is uncommon but may be useful if you want to deplete the account quickly for estate planning reasons or to manage tax brackets strategically over a defined period.

Option 4: Treat as Deceased Owner (SECURE 2.0)

SECURE 2.0 added a new option allowing the surviving spouse to elect to be treated as the deceased owner for RMD purposes. This provides a unique combination of benefits:

• Uses the Uniform Lifetime Table (resulting in lower RMDs than the Single Life Expectancy Table)
• No 10% early withdrawal penalty before age 59-1/2
• RMDs are based on the deceased owner's age schedule

Minor Child Beneficiary Rules

A minor child of the deceased account owner qualifies as an eligible designated beneficiary and can stretch distributions over their life expectancy -- but only until they reach age 21. After that, the 10-year clock starts.

How the Rules Work

• Before age 21: The minor child takes annual RMDs based on the Single Life Expectancy Table
• At age 21: The 10-year rule begins, and the child must fully deplete the account by December 31 of the 10th year after turning 21
• Age 21 applies uniformly: The federal definition of majority (age 21) applies regardless of state law or student status

Disabled and Chronically Ill Beneficiary Exceptions

Disabled and chronically ill individuals are eligible designated beneficiaries who can stretch distributions over their own life expectancy, avoiding the 10-year rule entirely.

Disability Definition (IRC Section 72(m)(7))

A person is considered disabled if they are unable to engage in any substantial gainful activity by reason of a medically determinable physical or mental impairment that can be expected to result in death or to be of long-continued and indefinite duration. This is broadly similar to the Social Security Administration's disability standard.

Chronically Ill Definition (IRC Section 7702B(c)(2))

A person is chronically ill if they have been certified by a licensed health care practitioner as:

• Unable to perform at least 2 of 6 activities of daily living (eating, bathing, dressing, toileting, transferring, continence) for at least 90 days, or
• Requiring substantial supervision due to severe cognitive impairment

Both disabled and chronically ill beneficiaries use the Single Life Expectancy Table, with the factor recalculated annually. Because these beneficiaries often have lower incomes, the stretch approach can be especially valuable for keeping distributions within lower tax brackets.

Documentation of disability or chronic illness status should be established at the time of the account owner's death. Work with an estate attorney and the IRA custodian to ensure proper classification.

Inherited Roth IRA Rules

Inherited Roth IRAs follow different -- and generally more favorable -- rules than inherited Traditional IRAs. While the 10-year depletion requirement still applies to most non-spouse beneficiaries, the tax treatment is significantly better.

Key Differences from Inherited Traditional IRAs

The 5-Year Rule for Inherited Roth IRAs

Roth IRA distributions of earnings are only tax-free if the account meets the 5-year holding requirement (meaning the original owner first contributed to any Roth IRA at least 5 tax years before the distribution). If the original owner opened the Roth IRA less than 5 years before death, the earnings portion of distributions may be taxable, though the contributions portion is always tax-free.

For most inherited Roth IRAs where the original owner had the account for 5+ years, the beneficiary can withdraw the entire balance tax-free. The optimal strategy is typically to let the funds grow for as long as possible within the 10-year window and withdraw the full amount in year 10.

Tax Planning Strategies for Inherited IRAs

If you inherit a Traditional IRA subject to the 10-year rule, the distributions are taxed as ordinary income. Strategic planning can significantly reduce the total tax burden over the distribution period.

Strategy 1: Spread Distributions Across Tax Brackets

Rather than deferring all distributions to year 10 (which could result in a massive taxable event), consider spreading withdrawals across all 10 years to stay within lower federal tax brackets. Model each year's income to determine the optimal withdrawal amount.

Strategy 2: Time Distributions to Lower-Income Years

Consider accelerating distributions during years when your other income is lower:

• Between jobs or during a career transition
• Years before Social Security benefits begin
• Years with significant deductions (medical expenses, charitable contributions)
• Early retirement years before your own RMDs start

Strategy 3: Coordinate with Roth Conversions

If you have your own Traditional IRA or 401(k), consider how inherited IRA distributions interact with Roth conversions. You generally cannot convert an inherited IRA directly (non-spouse beneficiaries), but you can coordinate the timing of inherited IRA distributions with your own Roth conversion strategy to manage your overall tax bracket.

Strategy 4: Offset with Deductions and Credits

Plan inherited IRA distributions for years when you have offsetting deductions:

• Charitable contributions (consider bunching donations into distribution years)
• Tax-loss harvesting to offset capital gains that may accompany higher income years
• Business losses or rental property deductions

Strategy 5: Consider State Tax Implications

Inherited IRA distributions are taxed at the state level in most states. If you are planning a move, consider timing distributions for years when you reside in a state with no income tax (such as Florida, Texas, Nevada, or Wyoming) or a lower state tax rate.

Non-Designated Beneficiaries: Estates, Charities, and Certain Trusts

When the beneficiary is not an individual -- such as an estate, charity, or a trust that does not qualify as a "see-through" trust -- different and generally less favorable rules apply:

• Owner died before the RBD: The entire account must be distributed by December 31 of the 5th year after the owner's death (the 5-year rule)
• Owner died on or after the RBD: Annual distributions based on the deceased owner's remaining life expectancy, reducing by 1.0 each year

These rules make it especially important to name individual beneficiaries on your retirement accounts rather than letting them pass through your estate. Consult an estate planning attorney to ensure your beneficiary designations are up to date.

Common Mistakes With Inherited IRAs

1. Missing the annual RMD requirement: Many beneficiaries assume they only need to empty the account by year 10, not realizing that annual distributions are required when the owner died after the RBD
2. Failing to retitle the account properly: An inherited IRA should be titled as "[Deceased Owner's Name] IRA FBO [Beneficiary Name]" -- never moved into the beneficiary's own IRA (for non-spouse beneficiaries)
3. Taking a full distribution in year 1: Withdrawing the entire balance creates a single large taxable event; spreading distributions can save thousands in taxes
4. Missing the December 31 deadline: The 10-year deadline is December 31 of the 10th year after the year of death, not the anniversary of the death date
5. Confusing the before/after RBD rules: Whether annual RMDs are required during the 10-year window depends entirely on when the original owner died relative to their RBD
6. Assuming grandchildren qualify as minor-child EDBs: Only the deceased owner's own children (biological or legally adopted) qualify for the minor child exception
7. Ignoring state income taxes: Inherited IRA distributions are taxed at the state level in most states, which can add 3% to 13% to the tax burden

Inherited IRA Rules: Timeline Summary

Sources

• IRS Publication 590-B: Distributions from Individual Retirement Arrangements -- Single Life Expectancy Table, beneficiary distribution rules
• IRS: Required Minimum Distributions for IRA Beneficiaries -- Beneficiary types and distribution period tables
• IRS Notice 2024-35 -- RMD relief for inherited IRA beneficiaries, 2024 waiver provisions
• SECURE 2.0 Act of 2022 (H.R. 2954) -- RMD age changes, penalty reduction, and new beneficiary options
• Fidelity: Inherited IRA Withdrawals and Beneficiary RMD Rules
• Vanguard: RMD Rules for Inherited IRAs
• Charles Schwab: Inherited IRA Rules & SECURE Act 2.0 Changes