Inherited IRA 10-Year Rule Explained

Published August 12, 2026 Updated October 26, 2026 Retirement Muhammad Rashid

If you inherited an IRA or a 401(k) from someone who died after 2019, there is a good chance the “10-year rule” applies to you. It says the inherited account must be completely emptied by the end of the tenth year after the year of death. That part is simple. The confusing part, which the IRS settled in final regulations that apply from 2025, is whether you also have to take money out every year in between.

This guide explains who is covered, the deadline, the annual distribution question and how to plan withdrawals. The inherited IRA RMD calculator estimates your required amounts year by year.

Where the rule came from

Before 2020, most beneficiaries could “stretch” an inherited IRA by taking small required distributions over their own life expectancy. The SECURE Act ended the stretch for most non-spouse beneficiaries of owners who died in 2020 or later and replaced it with the 10-year rule. IRS Publication 590-B describes the current rules for beneficiaries.

Who has to follow the 10-year rule

The rule applies to “designated beneficiaries” who are not “eligible designated beneficiaries.” In practice, that is most adult children, grandchildren, siblings more than 10 years younger, friends and other individuals.

Eligible designated beneficiaries can still use life-expectancy payouts instead. They are:

the owner’s surviving spouse,
the owner’s minor child (until the child reaches 21, after which the 10-year clock starts),
a disabled or chronically ill individual, and
an individual not more than 10 years younger than the owner.

A surviving spouse has extra choices, including treating the IRA as their own. Beneficiaries that are not individuals, such as an estate or charity, follow different rules, generally a five-year rule or the owner’s remaining life expectancy.

The deadline

The account must be fully distributed by December 31 of the year that contains the 10th anniversary of the owner’s death. If the owner died at any point in 2025, the deadline is December 31, 2035. If the owner died in 2021, it is December 31, 2031.

Do you need annual withdrawals in years 1 to 9?

This depends on whether the original owner had reached their required beginning date (RBD) before death. The RBD is generally April 1 of the year after the owner reached the age at which RMDs start, currently 73.

Owner died before the RBD: no annual distributions are required. You can take money out whenever you like, as long as the account is empty by the 10-year deadline.
Owner died on or after the RBD: under the final regulations, you must take an annual RMD in each of years 1 through 9, based on your life expectancy, and empty the account by the end of year 10. The idea is that once distributions have begun, they cannot stop.

For Roth IRAs, owners never have an RBD, so beneficiaries are treated as if the owner died before it. Annual withdrawals are not required, but the 10-year deadline still applies.

What about years when the rules were unclear?

The IRS proposed the annual-RMD interpretation in 2022, and many beneficiaries had not expected it. The IRS issued a series of notices, starting with Notice 2022-53, that waived the penalty for missed annual distributions in 2021 through 2024 for affected beneficiaries. The final regulations apply from 2025, so annual RMDs are expected from 2025 onward where they apply. The relief did not move the 10-year deadline itself.

How the annual amount is calculated

For a beneficiary subject to annual RMDs, the first-year amount is the prior December 31 balance divided by the beneficiary’s life expectancy from the IRS Single Life Table in Publication 590-B, using their age in the year after death. Each following year, subtract one from that factor rather than looking it up again.

Example: a 50-year-old inherits a $400,000 traditional IRA from a parent who was already taking RMDs. If the life expectancy factor for age 51 is about 35, the first annual RMD is roughly $400,000 ÷ 35 ≈ $11,400. Annual RMDs at that pace leave most of the balance to be withdrawn by year 10, which leads to the planning question.

Planning withdrawals around taxes

Distributions from an inherited traditional IRA are taxed as ordinary income. Leaving everything until year 10 can push one year’s income into a much higher bracket. Many beneficiaries spread withdrawals more evenly instead, taking more than the minimum in low-income years such as a gap between jobs or early retirement before Social Security begins.

A simple approach is to divide the balance by the years remaining and adjust as your income changes. With the $400,000 example, roughly $40,000 to $50,000 a year empties the account on schedule without a single large spike. The income tax calculator helps you see how each extra withdrawal changes your bill.

Inherited Roth IRAs work the other way. Qualified withdrawals are generally tax-free, so many beneficiaries leave the money to grow as long as possible and withdraw it at the end of year 10.

Penalties for missing a distribution

If you miss a required distribution, the excise tax is 25% of the amount not taken. SECURE 2.0 reduced this from 50%, and it drops to 10% if you correct the shortfall in a timely way. You can also ask the IRS to waive it for reasonable error using Form 5329. Missing the final 10-year deadline is the costly mistake, because the shortfall could be most of the account.

Practical steps

Retitle the account as an inherited IRA. Do not roll it into your own IRA unless you are the surviving spouse.
Find out whether the owner had reached the RBD and whether they took their RMD for the year of death. If not, the beneficiary must take it.
Write down your 10-year deadline.
Decide on a yearly withdrawal plan that at least meets any annual RMD.
Recheck each year; tax brackets and your income will change.

For the owner’s own RMDs before inheritance, the RMD calculator covers the standard Uniform Lifetime Table.

This article is general information, not tax or legal advice. Inherited retirement accounts have many special cases; confirm your situation with Publication 590-B, your account custodian or a tax professional.