If you inherited an IRA and someone mentioned the “10-year rule,” here is what they mean in plain English: many non-spouse beneficiaries must empty the inherited IRA by the end of the 10th year after the original owner’s death. That deadline can create very real tax consequences, so it is worth understanding who the rule applies to, when annual required distributions might still be needed, and how to plan withdrawals without accidentally spiking your tax bill.
What the 10-year rule is
The 10-year rule is a distribution rule for certain inherited retirement accounts. If it applies to you, the inherited IRA must be fully distributed by December 31 of the 10th year after the year of death.
Example: If the IRA owner died in 2025, the inherited IRA generally must be emptied by December 31, 2035.
Does the rule tell you how much to withdraw each year?
Not always. Under the original SECURE Act approach, many beneficiaries could choose to take nothing for years 1 through 9 and then withdraw everything in year 10. But IRS guidance after the SECURE Act introduced an important twist for some people: annual required minimum distributions (RMDs) may still be due in years 1 through 9 depending on whether the original owner had started RMDs before death.
Which inherited accounts are affected
The 10-year rule commonly applies to beneficiaries who inherit:
- Traditional IRAs
- Roth IRAs (yes, even though Roth withdrawals can be tax-free, the timing rules can still apply)
- Employer plans like 401(k)s, 403(b)s, and 457(b)s, if left to a non-spouse beneficiary (sometimes handled through an inherited IRA rollover, but plan rules vary)
The exact handling can vary based on the plan and beneficiary choices, but the core idea is the same: there is a 10-year window to get the money out for many non-spouse heirs.
Quick caution: If the beneficiary is an estate or a non-qualifying trust (sometimes called a non-designated beneficiary situation), different rules can apply, and the payout period can be shorter. If a trust is involved, confirm how it is classified before acting.
Who the 10-year rule usually applies to
In general, the 10-year rule applies to most non-spouse beneficiaries who inherit from someone who died in 2020 or later (SECURE Act changes), such as:
- Adult children
- Grandchildren
- Siblings (unless they qualify as an exception category)
- Unmarried partners
- Friends or other individuals
- Many trusts (depending on how the trust is drafted and classified)
But there are key exceptions. The IRS calls certain beneficiaries eligible designated beneficiaries, and they may be allowed to stretch distributions longer than 10 years.
Helpful vocabulary (high level): A designated beneficiary is generally an individual named on the beneficiary form (and some qualifying trusts can be treated similarly). An eligible designated beneficiary is a special subset that can often use life expectancy payouts. If there is no designated beneficiary (for example, the estate is beneficiary, or the trust does not qualify), different rules can apply.
Exceptions to the 10-year rule
These are the major groups that can get different distribution treatment (often a “life expectancy” method instead of the 10-year deadline):
Spouse beneficiaries
A surviving spouse has special options, including treating the IRA as their own in many cases (which can avoid the inherited IRA 10-year setup entirely). Spouses can also keep it as an inherited IRA depending on what is most beneficial.
Minor child of the account owner
A minor child of the original owner (not a grandchild) can generally use life expectancy distributions until age 21. After that, the 10-year rule typically kicks in and the 10-year clock generally starts at that point.
Note: If the child is disabled or chronically ill under IRS definitions, that may keep them in an eligible category beyond age 21.
Disabled or chronically ill beneficiaries
People who meet the IRS definitions for disabled or chronically ill may qualify for life expectancy payouts rather than the 10-year deadline.
Beneficiary not more than 10 years younger than the original owner
This exception often applies to an older sibling or a close-in-age partner. If you are no more than 10 years younger than the person who died, you may be able to use life expectancy distributions instead of the 10-year rule.
Important: Exceptions are powerful, but the details matter, especially with trusts and beneficiaries who change status over time (like a minor child turning 21). If you suspect you qualify, it is worth confirming with the custodian and a tax pro.
The big gotcha on annual RMDs
This is the part that trips people up.
Under current IRS guidance as of 2024 to 2025 (including regulations and related IRS notices in this area), if the original IRA owner had reached their required beginning date (meaning RMDs had started or were required to start), then certain beneficiaries who are subject to the 10-year rule may also have to take annual RMDs in years 1 through 9 and still empty the account by year 10.
If the original owner died before they were required to start RMDs, then many beneficiaries under the 10-year rule may not have to take annual RMDs, as long as the account is emptied by the end of year 10.
One more nuance: Enforcement and penalty relief around missed inherited RMDs has been a moving target in recent years for some beneficiaries. Even if relief applies, the cleanest move is still to confirm the rule that applies to your account and avoid missing required distributions in the first place.
Inherited Roth IRA and the 10-year rule
Many non-spouse beneficiaries who inherit a Roth IRA after 2019 still fall under the 10-year rule.
The tax difference is what makes inherited Roth IRAs feel less painful: qualified Roth withdrawals are typically tax-free. But the timing rule can still matter because:
- You may want to coordinate Roth withdrawals with your own tax planning and cash needs.
- The account must usually be emptied by the deadline even if you would rather let it keep compounding.
Key caveat: Tax-free treatment depends on Roth rules, including the 5-year aging rule for earnings. (Roth contributions are generally not taxable when withdrawn, but earnings may be taxable if the Roth is not yet qualified.) If you are not sure whether the Roth meets the 5-year rule, ask the custodian.
One key clarity point: Because the original Roth IRA owner does not have a required beginning date, beneficiaries who are subject to the 10-year rule typically do not have annual RMDs in years 1 through 9. They generally just have to make sure the account is fully emptied by the end of year 10.
Even so, other beneficiary categories (like eligible designated beneficiaries) can follow different payout methods, so it is still smart to confirm your specific setup with the custodian.
How the 10-year rule affects taxes
With an inherited traditional IRA, withdrawals are usually taxed as ordinary income. That means the 10-year clock can create a “tax spike” if you wait and take large withdrawals late in the window.
Common tax ripple effects
- Pushing yourself into a higher federal tax bracket
- Increasing state income taxes (if your state taxes income)
- Reducing credits and deductions that phase out with higher income
- Triggering higher Medicare premiums later (IRMAA) if you are near that stage of life
With an inherited Roth IRA, taxes may be minimal, but the planning still matters because distribution timing affects how long the money stays invested.
How to plan withdrawals
There is no one perfect strategy, but here are approaches that tend to work well for real life budgets and tax bills.
1) Spread withdrawals to smooth out taxes
If you expect steady income, consider taking roughly equal withdrawals over 10 years to avoid a monster year 10 tax hit.
2) Withdraw more in lower-income years
If you have a year with lower income (job change, unpaid leave, starting a business, going back to school), you might “fill up” a lower tax bracket by withdrawing more from the inherited IRA that year.
3) Plan around bonuses and big life events
If you know year 3 includes a large bonus or year 6 includes selling a business, you can pull less from the inherited IRA in those high-income years and more in other years.
4) Use withholding or quarterly payments to avoid surprises
Inherited IRA distributions can have taxes withheld. You can also pay estimated taxes. The goal is to avoid underpayment penalties and that sinking “I owe how much?” feeling in April.
5) Coordinate with charitable giving (when it fits)
For people who are age 70.5 or older, qualified charitable distributions (QCDs) can sometimes reduce taxable income.
Important QCD details: QCDs are generally allowed from an inherited IRA if the beneficiary is otherwise eligible (including the age rule) and the money goes directly to a qualified charity. Employer plans typically need to be rolled to an IRA first before a QCD is possible, and special restrictions can apply for SEP and SIMPLE IRAs with ongoing employer contributions. If you want to use QCDs, confirm eligibility before you move money.
What to do after you inherit
- Confirm what you inherited. Traditional IRA, Roth IRA, or an employer plan. Ask the custodian what type of account it is and what beneficiary category you are in.
- Ask which distribution rule applies. Specifically ask: “Am I under the 10-year rule, and do I have annual RMDs in years 1 through 9?”
- Open the inherited IRA correctly. The titling matters. A common format includes the deceased owner’s name and indicates it is for the benefit of (FBO) you as the beneficiary.
- Check if the deceased had an RMD due in the year of death. This is separate from the 10-year rule. If an RMD was not taken before they died, it may need to be taken by the beneficiary, depending on the situation.
- Create a simple withdrawal plan. Even a basic spreadsheet that maps out years 1 to 10 and estimated withdrawals beats winging it.
- Coordinate with a tax pro if the inherited IRA is sizable. If withdrawals could bump you into higher brackets, professional planning often pays for itself.
Plan-specific note: If you inherited a 401(k) or similar employer plan, the plan may have its own distribution options and constraints. Do not assume it works exactly like an IRA until you confirm the plan rules.
Quick FAQs
When does the 10-year clock start?
It starts after the year of death. The inherited account generally must be fully distributed by December 31 of the 10th year after the death year.
Do I have to take a distribution every year?
Sometimes yes, sometimes no. Some beneficiaries under the 10-year rule may have annual RMD requirements in years 1 through 9 based on whether the original owner had reached the point where RMDs were required. When in doubt, ask the custodian to confirm the required schedule for your specific inherited account.
What happens if I miss the deadline?
Missing RMDs or failing to empty the account on time can lead to IRS penalties and corrected filing requirements. If you are at risk of missing a required withdrawal, contact the custodian and a tax professional as soon as possible to discuss correction steps and whether any relief applies.
Is the 10-year rule the same as the 5-year rule?
No. The 5-year rule is a different rule that can apply in specific inherited retirement scenarios. Most people hearing about inherited IRAs today are dealing with the 10-year rule under the SECURE Act framework.
My takeaway
If you inherited an IRA and you are a non-spouse beneficiary, assume the 10-year rule applies until proven otherwise. Then immediately clarify one key detail: are annual RMDs required during the 10-year window? Once you know that, you can build a simple withdrawal plan that protects you from penalties and keeps taxes as reasonable as possible.
If you are gathering information to discuss with the custodian or your tax pro, the most helpful starting points are: (1) whether it is a traditional or Roth IRA (or an employer plan), (2) the year of death, (3) whether the person had started RMDs, and (4) your relationship to the person who passed away.