If you inherited an IRA and someone casually told you, “Just take it out over 10 years,” you are not alone. The 10-year rule for inherited IRAs is real, but it is also one of those rules that gets oversimplified in ways that can lead to tax surprises or even penalties.
This guide breaks down what the 10-year rule actually says, who it applies to, how withdrawals might be required during the 10-year window, and a few practical strategies to keep more of the money in your pocket.
What the 10-year rule means
The 10-year rule generally means that if you inherit an IRA (or a retirement plan account like a 401(k) that you move into an inherited IRA, if the plan allows), you may be required to fully withdraw the entire account by December 31 of the year that contains the 10th anniversary of the original owner’s death.
So if the IRA owner died in 2025, the account usually must be emptied by December 31, 2035.
It is a deadline, not a payment plan
A common misunderstanding is that the 10-year rule requires you to take equal withdrawals each year. In many cases, it does not. The rule is often just a hard deadline.
However, for some beneficiaries, there can also be annual required minimum distributions (RMDs) during those 10 years. More on that in a minute.
Why the rule exists
The 10-year rule largely comes from the SECURE Act, which changed inherited retirement account rules for many non-spouse beneficiaries starting in 2020. The big idea was to speed up how quickly inherited retirement accounts get distributed and taxed.
Before these changes, many beneficiaries could “stretch” withdrawals over their life expectancy, keeping money growing tax-deferred for decades.
Who the 10-year rule applies to
In most everyday situations, the 10-year rule applies when:
- You inherit an IRA from someone who was not your spouse, and
- You are not in a special category that qualifies for different payout rules.
Many adult children inheriting a parent’s IRA fall into this bucket.
Eligible designated beneficiaries
The IRS treats some beneficiaries as eligible designated beneficiaries (EDBs). EDBs often have more flexible options, including the ability to take distributions over a longer period in certain situations. Categories commonly include:
- Spouses
- Minor children of the account owner (typically until they reach the age of majority, then the 10-year rule usually kicks in; in some cases this can extend beyond 18 for certain students)
- Disabled individuals (as defined by IRS rules)
- Chronically ill individuals (as defined by IRS rules)
- Individuals not more than 10 years younger than the original account owner
If you think you might be in one of these groups, it is worth double-checking before you set up a withdrawal plan, because your options could be very different.
The part that trips people up: RMDs inside the 10-year rule
Here is the nuance: the 10-year rule can operate in two different ways depending on whether the original IRA owner died before or on/after their required beginning date (RBD) for RMDs.
In plain English, many people frame this as: Had they already started taking RMDs? That is a helpful shortcut, but the legal trigger is the RBD, not whether they actually took the first one. The RBD is generally April 1 of the year after the account owner reaches their applicable RMD age.
If the owner died before the RBD
In many cases, you can wait and take withdrawals whenever you want, as long as the entire account is emptied by the end of year 10.
This is the version most people mean when they say “you just have 10 years.”
If the owner died on or after the RBD
This is where people get blindsided. Under IRS guidance that has evolved in recent years (including final regulations released in 2024 that generally apply going forward), many beneficiaries in this scenario may need to take annual RMDs in years 1 through 9, and then still empty the account by the end of year 10.
Translation: you might have two requirements:
- Take yearly RMDs (depending on your situation and the current rules for the year you are filing), and
- Make sure the balance is $0 by the end of year 10
If you inherited an IRA and the person was past their RBD, do not assume you can simply wait until year 10. Confirm whether annual RMDs apply in your case.
One more wrinkle: the IRS provided penalty relief for certain earlier years while the rules were being clarified. So if you inherited an IRA in the early SECURE Act years, your compliance history (and whether a missed RMD creates a penalty) may look different than someone inheriting now. When in doubt, ask a tax pro to verify the current-year requirement and whether any past-year fixes are needed.
Does the 10-year rule apply to Roth IRAs?
Yes, the 10-year rule can apply to inherited Roth IRAs as well for many non-spouse beneficiaries.
The difference is in the tax bite:
- Inherited traditional IRA withdrawals are generally taxable as ordinary income.
- Inherited Roth IRA withdrawals are often tax-free if the Roth was held long enough (the 5-year rule), but you still may have to follow the 10-year deadline.
Key Roth clarification
Because Roth IRA owners do not have RMDs during their lifetime, they are generally treated as having died before their RBD. As a result, most non-spouse beneficiaries subject to the 10-year rule for an inherited Roth IRA are typically dealing with the year-10 deadline, not annual RMDs in years 1 through 9 (unless they qualify for and elect a different payout method, such as an EDB using life expectancy).
Even when withdrawals are tax-free, the timing still matters for planning purposes, especially if you want to keep money invested as long as possible within the allowed window.
How taxes work when you take money out
Withdrawals from an inherited IRA can stack on top of your regular income.
That matters because pulling a big chunk in one year can:
- Push you into a higher tax bracket
- Increase taxes on Social Security (if applicable)
- Impact certain deductions and credits that phase out at higher incomes
- Increase Medicare premium brackets later (IRMAA) if you are near that age
Inherited IRA distributions are usually reported on a 1099-R. For traditional IRAs, the taxable amount is commonly the amount you withdrew (unless there is after-tax basis involved).
Smart withdrawal strategies
There is no one “best” method, but these strategies are common for readers who want to avoid unnecessary tax pain.
1) Spread withdrawals across multiple years
If you have flexibility (and no annual RMD requirement), spreading withdrawals can help you stay in a lower bracket instead of creating one giant tax year.
2) Take more in low-income years
Years where your income dips can be a great time to withdraw more from an inherited traditional IRA. Examples:
- Going back to school
- Changing jobs
- Taking unpaid leave
- Early retirement before Social Security or pensions begin
3) Coordinate with your own retirement contributions
If you are still working, increasing pre-tax contributions (like a 401(k)) in the same year you take inherited IRA withdrawals can help offset taxable income.
4) Plan around big deductions
Large charitable gifts, business losses, or itemized deduction spikes may create a year where a larger withdrawal is less painful tax-wise.
5) Consider withholding or estimated taxes
Inherited IRA withdrawals can be big enough to cause an underpayment surprise. You can often choose tax withholding when you take a distribution, or pay quarterly estimated taxes.
Penalties to know about
Missing the year-10 deadline
If you are subject to the 10-year rule and you do not empty the account by the end of year 10, you may face an excise tax tied to missed required distributions.
Missing annual RMDs (when they apply)
If annual RMDs apply to you and you miss them, penalties can also apply. Thanks to the SECURE 2.0 Act, the old penalty that many people remember (50%) was reduced. The excise tax is generally 25% of the amount not taken, and it can drop to 10% if corrected in a timely manner (and the paperwork is handled properly).
If you think you missed something, talk to a tax pro quickly. Fixing it sooner usually gives you more options, and in some cases you may be able to request penalty relief.
Quick checklist
When I’m helping a friend talk through this, here’s the order I like:
- Confirm what you inherited: traditional IRA, Roth IRA, 401(k), etc.
- Identify your beneficiary category: spouse, EDB, or standard non-spouse beneficiary.
- Get the date of death and determine your 10-year deadline.
- Ask whether the original owner died before or on/after their RBD (this affects whether annual RMDs may apply).
- Estimate your tax bracket for different withdrawal schedules.
- Set reminders for annual withdrawals (if needed) and the year-10 final deadline.
FAQ
Can I take nothing for 9 years and withdraw it all in year 10?
Sometimes yes, especially if the original owner died before their RBD and you are a beneficiary subject only to the 10-year deadline. But if annual RMDs apply in your situation, waiting could create penalties. Confirm which rule set you fall under.
Does the 10-year rule mean 10 distributions?
No. It typically means the account must be fully distributed by the end of the 10th year. The number and timing of withdrawals depends on your category and whether annual RMDs apply.
Do I have to pay the 10% early withdrawal penalty?
Inherited IRAs are generally not subject to the 10% early distribution penalty that applies to many early withdrawals from your own IRA. Taxes can still apply for traditional IRAs, and you still must follow inherited IRA distribution rules.
What if there are multiple beneficiaries?
Multiple beneficiaries can complicate things, especially if the IRA was not split into separate inherited IRA accounts. Deadlines and calculation rules can differ based on how the account is titled and when it is divided.
The bottom line
The inherited IRA 10-year rule is simple in concept: for many non-spouse beneficiaries, the account must be emptied by the end of the 10th year after the owner’s death. The tricky part is that some people also need to take annual RMDs during that window, especially if the owner died on or after their required beginning date.
If you take one action after reading this, make it this: find out whether annual RMDs apply in your case, then choose a withdrawal plan that balances taxes, cash needs, and peace of mind.