If you recently inherited an IRA, you probably expected a simple “transfer it into your name and keep investing” situation. Instead, you got hit with a rule that sounds straightforward but has a lot of fine print: the 10-year rule.

Here is the plain-English version: many non-spouse beneficiaries must empty an inherited IRA by the end of the 10th year after the original owner dies. The tricky part is figuring out (1) whether the 10-year rule applies to you, and (2) whether you also need to take annual required minimum distributions, also known as RMDs, during those 10 years.

A person sitting at a kitchen table reviewing inherited IRA beneficiary paperwork with a laptop and a calculator, natural window light, real-life photo

The 10-year rule in one sentence

If you are a non-spouse beneficiary who is not an eligible designated beneficiary, you generally must withdraw all money from the inherited IRA by December 31 of the 10th year after the year of the original account owner’s death.

Important: This rule comes from the SECURE Act and generally applies when the death occurred after December 31, 2019. It can apply to both traditional and Roth inherited IRAs. The tax impact is different, but the empty-by-10-years concept is similar.

Note: If the owner died in 2019 or earlier, your inherited IRA may be under the older “stretch” rules. That is a different playbook.

Who the 10-year rule applies to

The first step is identifying what kind of beneficiary you are. In inherited IRA land, labels matter.

Most adult non-spouse beneficiaries

If you are an adult child, grandchild, sibling, friend, or any non-spouse person who does not qualify for an exception, you are typically in the 10-year bucket.

Trusts and estates

This is where things can turn into a choose-your-own-adventure.

  • Some “see-through” (look-through) trusts are treated as having designated beneficiaries, and the 10-year framework may apply depending on who is treated as the underlying beneficiary.
  • Estates and non-qualifying trusts are usually not designated beneficiaries. In those cases, the distribution rule is often either the 5-year rule (if the owner died before their RMD start date) or a life-expectancy-based payout tied to the decedent (sometimes called “ghost” life expectancy) if death occurred after that date.

If a trust or estate is involved, it is worth getting professional help. Small details like beneficiary language and timing can change the outcome.

Who does not follow the 10-year rule

Certain beneficiaries get special treatment as eligible designated beneficiaries (EDBs). EDBs can often stretch distributions over life expectancy instead of being forced into the 10-year deadline, at least for a period of time.

  • Surviving spouse (spouses have the most flexibility and may be able to treat the IRA as their own)
  • Minor child of the account owner (not a grandchild). They can often use life expectancy rules until they reach the age of majority, then the 10-year rule generally starts
  • Disabled individual (as defined by IRS standards)
  • Chronically ill individual
  • Someone not more than 10 years younger than the account owner (often a sibling or partner close in age)

Even within these exceptions, the “right” distribution schedule depends on the details. But if you are a typical adult non-spouse beneficiary, plan on the 10-year rule.

How withdrawals work in the 10 years

This is where inherited IRAs get messy. Many people assume: “I can wait until year 10 and take it all out.” Sometimes that works, and sometimes it creates a penalty problem.

The core requirement

You must have a zero balance by December 31 of the 10th year after the year of death.

Do you also need annual RMDs in years 1 through 9?

Here is the clean rule under the IRS final regulations (finalized in July 2024) for many designated beneficiaries who are subject to the 10-year rule:

  • If the original owner died before their required beginning date (RBD), no annual RMDs are required in years 1 through 9. You just have to empty the account by the year-10 deadline.
  • If the original owner died on or after their RBD, annual RMDs are generally required in years 1 through 9, and you still must empty the account by year 10.

Big Roth clarification: Original Roth IRA owners do not have lifetime RMDs, which means they have no RBD. So if you inherited a Roth IRA and you are subject to the 10-year rule, you do not have annual RMDs in years 1 through 9. Your job is to get it to zero by the year-10 deadline.

One more practical note: because IRS guidance changed over time, the IRS provided penalty relief for certain missed inherited IRA RMD years for many taxpayers as the rules were being clarified. That does not mean you should wing it going forward.

Marcus note: When I was digging out of debt, I learned the hard way that “I thought it worked like this” is expensive. Inherited IRA rules are one of those places where you want receipts, not vibes.

Quick example (the annual RMD situation)

Let’s say you inherit a traditional IRA from a parent who was already taking RMDs. You are not an EDB. In that case, you generally need to (1) take annual RMDs in years 1 through 9, and (2) withdraw whatever is left by December 31 of year 10.

If you inherit a Roth IRA instead, you generally skip the years 1 through 9 RMD requirement, but you still must empty it by year 10.

Traditional vs Roth under the 10-year rule

Traditional inherited IRA

  • Withdrawals are usually taxable income to you.
  • Large withdrawals can push you into a higher tax bracket, affect tax credits, and increase Medicare premium surcharges later.
  • If annual RMDs apply and you miss them, you can face an excise tax.

Roth inherited IRA

  • Withdrawals are often tax-free if the Roth is “qualified,” which usually means the decedent’s Roth met the 5-year aging rule.
  • The 10-year emptying rule can still apply, but the tax planning is usually easier.
  • No years 1 through 9 RMDs apply under the 10-year rule, because the original Roth owner had no lifetime RMDs.
An older adult sitting in a living room reviewing IRA account statements on paper with reading glasses and a cup of coffee, candid lifestyle photo

When does the 10-year clock start?

The countdown is based on the year of the original owner’s death.

  • For distribution timing, people often talk about “year 1” as the year after death, but
  • The account must be fully distributed by December 31 of the 10th year after the year of death.

Example: If the owner dies in 2026, the account generally must be emptied by December 31, 2036.

Also note: Many inherited IRAs must be set up properly as an Inherited IRA (Beneficiary IRA). Do not move it into your own IRA unless you are a spouse and have confirmed that is the best option.

Smart ways to withdraw

There is no single best strategy. The right plan depends on your tax bracket, income stability, and whether you need the money.

Option 1: Spread withdrawals

This is the “stress-free spreadsheet” approach. You withdraw a similar amount each year, aiming to keep taxes smoother.

  • Good for: people with stable income who want predictability
  • Watch out for: years with bonuses or big income jumps

Option 2: Use low-income years

If you expect a gap year, career change, sabbatical, or early retirement, you might take larger withdrawals when your taxable income is lower.

  • Good for: freelancers, commission workers, or anyone with variable income
  • Watch out for: under-withdrawing early and getting stuck with a big year-10 tax bill on a traditional IRA

Option 3: Let it grow, then withdraw later

This can make sense for Roth inherited IRAs or for smaller balances.

  • Good for: Roth beneficiaries who do not need the money now
  • Watch out for: forgetting the year-10 deadline, or (for traditional IRAs when the owner died on or after the RBD) failing to take required annual RMDs in years 1 through 9

Common mistakes

  • Missing the year-10 deadline. Even one day late can trigger penalties.
  • Assuming you can “roll it into your IRA” as a non-spouse. In most cases, you cannot.
  • Ignoring the original owner’s RMD status. This is the key factor in whether annual RMDs apply during the 10-year window for traditional IRAs.
  • Taking a huge withdrawal without tax planning. Traditional IRA distributions stack on top of your income.
  • Not updating withholding. You can choose to withhold federal (and sometimes state) taxes from distributions to avoid a nasty April surprise.

Penalty note: If you miss an RMD when one is required, the IRS can assess an excise tax. Under SECURE 2.0, that penalty is generally 25% of the missed amount, and it can be reduced to 10% if corrected in a timely way (and you meet the requirements).

Quick checklist

  1. Confirm what you inherited: traditional IRA or Roth IRA.
  2. Confirm your beneficiary type: spouse, EDB, standard designated beneficiary, or non-designated beneficiary (estate or certain trusts).
  3. Ask whether annual RMDs are required based on the owner’s RMD start status (traditional IRA issue) and your beneficiary category.
  4. Mark the year-10 deadline on your calendar (and set reminders for year 9).
  5. If there are multiple beneficiaries, ask about splitting the IRA. In many cases, splitting into separate inherited IRAs by the applicable deadline can preserve each beneficiary’s correct treatment.
  6. Choose a withdrawal plan that fits your taxes and cash flow.
  7. Keep documentation: beneficiary form, death certificate, custodian letters, RMD calculations.
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FAQ

Can I take nothing for 9 years and withdraw everything in year 10?

Sometimes. If annual RMDs are not required, you may be able to wait. If annual RMDs do apply (commonly when a traditional IRA owner died on or after their RBD) and you skip them, that can create penalty exposure. Confirm with the custodian or a tax pro.

Is the 10-year rule the same for a Roth inherited IRA?

The timeline is often the same, but the tax impact is usually different. Also, under the 10-year rule, inherited Roth IRAs generally do not have annual RMDs in years 1 through 9. You simply must empty the account by the year-10 deadline. Roth withdrawals are often tax-free if the decedent’s Roth met the 5-year rule.

What if there are multiple beneficiaries?

Often, each beneficiary can set up their own inherited IRA and follow rules based on their status. Deadlines and options can change depending on whether the IRA was split promptly and how beneficiaries were listed, so it is worth asking the custodian about the specific cutoff date for separation.

What if I inherited an IRA from someone who inherited it?

Successor beneficiary rules can apply, and timelines can be different. This is a good moment to get professional guidance because the “starting point” is not always what people assume.

The bottom line

The 10-year rule for an inherited IRA is simple on paper: empty the account by the end of year 10. Real life is where it gets complicated, especially when you factor in the original owner’s RMD status (traditional IRA issue), your tax bracket, and whether you qualify for an exception.

If you want the safest next step, do this today: call the IRA custodian and ask two questions: (1) “Am I subject to the 10-year rule?” and (2) “Do I have annual RMDs due in years 1 through 9?” Then build your withdrawal plan around that answer.