What are the rules for an inherited IRA under the SECURE Act?

TL;DR. Non-spouse beneficiaries of IRAs inherited after 2019 must empty the account within 10 years under the SECURE Act's 10-year rule. If the original owner had already begun required minimum distributions, the beneficiary must also take annual RMDs during years one through nine, with the remaining balance fully distributed by December 31 of the tenth year. An inherited IRA calculator models the optimal annual withdrawal schedule to minimize the total tax burden across the 10-year window.

How the 10-year rule works for inherited IRAs

The SECURE Act of 2019 eliminated the stretch IRA for most non-spouse beneficiaries. Before 2020, a beneficiary could spread distributions over their own life expectancy — sometimes 40 or 50 years. Now, most non-spouse beneficiaries must fully distribute an inherited IRA by December 31 of the tenth year following the year of the original owner's death.

The critical nuance comes from final IRS regulations issued in July 2024: if the original account owner died on or after their required beginning date (generally April 1 of the year after turning 73), the beneficiary must take annual RMDs in years one through nine based on their own single life expectancy, and then withdraw any remaining balance in year 10. If the owner died before their required beginning date, no annual RMDs are required — the beneficiary only needs to empty the account by the end of year 10.

Worked example. A 50-year-old non-spouse beneficiary inherits a $500,000 traditional IRA in 2026 from a parent who was 78 and already taking RMDs. The beneficiary's single life expectancy factor at age 50 is 36.2. Year-1 RMD = $500,000 / 36.2 = $13,812. Each subsequent year, the divisor decreases by one (35.2, 34.2, etc.), and the RMD is recalculated on the prior-year-end balance. By year 10, whatever remains must be withdrawn in full. If the beneficiary takes only the minimum each year, the year-10 lump sum can be substantial — and could push them into a higher tax bracket. Spreading withdrawals more evenly across all 10 years often produces a lower total tax bill.

Try it with your numbers

What a good inherited IRA calculator should show

• Whether annual RMDs apply (owner died before vs. after required beginning date)
• Year-by-year withdrawal schedule across the full 10-year window with projected account growth
• Tax bracket impact of each annual distribution stacked on the beneficiary's other income
• Comparison of minimum-RMD-only vs. level-distribution strategies to show the total tax difference
• Deadline tracking — the December 31 of year 10 hard deadline and annual RMD deadlines

AdvisorCal's RMD Calculator handles inherited IRA scenarios. If you are also planning RMD strategies for your own retirement accounts, evaluating Roth conversions to reduce future taxable distributions, or modeling estate and gift tax strategies, those tools are included in the same subscription.

Key facts

• 10-year rule applies to: Most non-spouse beneficiaries of IRAs inherited after December 31, 2019.
• Annual RMDs required when: The original owner died on or after their required beginning date (age 73 for those born 1951-1959; age 75 for those born 1960+).
• No annual RMDs when: The original owner died before their required beginning date — the beneficiary only needs to empty the account by the end of year 10.
• Eligible designated beneficiaries (exempt from 10-year rule): Surviving spouses, minor children of the decedent (until majority), disabled or chronically ill individuals, and beneficiaries not more than 10 years younger than the decedent. These groups can still use the stretch IRA.
• Penalty for missed inherited IRA RMD: 25% excise tax on the shortfall, reduced to 10% if corrected within two years (SECURE 2.0 change).
• Inherited Roth IRAs: The 10-year rule still applies, but distributions are generally tax-free. No annual RMDs are required regardless of when the owner died — only the 10-year full-distribution deadline applies.

Common follow-ups

Do I have to take annual RMDs from an inherited IRA, or just empty it by year 10? It depends on whether the original owner had reached their required beginning date. If the owner died at age 78 and was already taking RMDs, you must take annual distributions in years one through nine using your own single life expectancy factor, then withdraw the remainder in year 10. If the owner died at age 65 — before RMDs started — you have full flexibility on timing, as long as the account is empty by December 31 of the tenth year. The IRS finalized this interpretation in July 2024 after years of uncertainty.

What happens if I miss an annual RMD from an inherited IRA? The penalty is a 25% excise tax on the amount you should have withdrawn but did not. SECURE 2.0 reduced this from the previous 50% penalty. If you correct the shortfall within two years by taking the missed distribution and filing an amended return, the penalty drops to 10%. Given the IRS's delayed guidance on inherited IRA RMDs, the agency waived penalties for missed 2021-2024 inherited IRA RMDs for beneficiaries subject to the 10-year rule — but that relief has not been extended to 2025 or later.

Can a non-spouse beneficiary do a Roth conversion on an inherited IRA? No. Non-spouse beneficiaries cannot convert an inherited traditional IRA to a Roth IRA. Only surviving spouses who elect to treat the inherited IRA as their own (via spousal rollover) can perform Roth conversions. Non-spouse beneficiaries can, however, plan their own Roth conversions on their personal retirement accounts in lower-income years to offset the tax impact of inherited IRA distributions.

How do the inherited IRA rules differ for a surviving spouse? A surviving spouse has three options not available to other beneficiaries: (1) roll the inherited IRA into their own IRA, resetting the RMD clock to their own age; (2) remain as beneficiary and take distributions based on the decedent's remaining life expectancy or their own, whichever is longer; or (3) elect the 10-year rule if they prefer accelerated distribution. Most surviving spouses choose the rollover because it defers RMDs until they reach their own required beginning date.

When this doesn't apply

The 10-year rule does not apply to eligible designated beneficiaries: surviving spouses, minor children of the decedent (until they reach the age of majority, at which point the 10-year clock starts), disabled or chronically ill beneficiaries, and individuals not more than 10 years younger than the deceased. These groups retain the pre-SECURE Act stretch IRA rules. The 10-year rule also does not apply to IRAs inherited before January 1, 2020 — those beneficiaries continue under the old life-expectancy stretch rules. Non-designated beneficiaries (estates, charities, non-qualifying trusts) follow a separate five-year rule or the decedent's remaining life expectancy, depending on whether the owner died before or after the required beginning date.

Sources

• IRS — Required Minimum Distributions for beneficiaries
• IRS — Final regulations on required minimum distributions (T.D. 10001, July 2024)
• Treasury/IRS — SECURE Act and SECURE 2.0 Act guidance

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