The SECURE Act 10-Year Rule for Inherited IRAs

What it is, who it applies to, and the annual RMD question most advisors get wrong.

What changed when the SECURE Act passed

Before the SECURE Act (pre-2020 deaths), non-spouse beneficiaries could "stretch" distributions over their own life expectancy — sometimes 40 or 50 years. A 40-year-old inheriting a parent's IRA could take small annual RMDs and let the majority of the account compound tax-deferred for decades.

The SECURE Act of 2019 eliminated the stretch for most beneficiaries on deaths occurring after December 31, 2019.¹ The new rule: full depletion within 10 years. For high-income inheritors, this compresses what was once a decades-long tax deferral into a 10-year window — often pushing distributions into the highest brackets.

If the original owner died before January 1, 2020: the pre-SECURE stretch rules still apply to that account. The 10-year rule does not reach back to earlier deaths.

Who is subject to the 10-year rule

Most non-spouse beneficiaries of inherited IRAs, inherited Roth IRAs, and inherited 401(k)s are subject to the 10-year rule when the original owner died after December 31, 2019. This includes:

• Adult children and grandchildren of the original owner
• Siblings, nieces, nephews, and other non-spouse relatives
• Non-relatives named as beneficiaries
• Estates and most trusts (with limited exceptions for trusts with EDB beneficiaries)

Inherited 401(k)s and other qualified plans follow the same 10-year depletion requirement for non-spouse beneficiaries — the SECURE Act applied to qualified plans, not just IRAs.

Who is exempt: Eligible Designated Beneficiaries

Five categories of beneficiaries qualify as Eligible Designated Beneficiaries (EDBs) and retain the stretch option under IRC § 401(a)(9)(E)(ii).¹ EDBs are NOT subject to the 10-year rule:

1. Surviving spouse — may roll over to own IRA (no RMD requirement until their own RBD) or keep as an inherited IRA and stretch distributions over their own life expectancy. See the Spousal Rollover vs. Inherited IRA guide for the full decision framework.
2. Minor child of the decedent — eligible to stretch until reaching the age of majority (varies by state, generally 18-21).² After that, a 10-year clock begins — they must deplete by December 31 of the 10th year after reaching majority.
3. Disabled individual — as defined under IRC § 72(m)(7). The disability must be medically determinable and render the individual unable to engage in substantial gainful activity.
4. Chronically ill individual — as defined under IRC § 7702B(c)(2). Must require substantial assistance with at least two activities of daily living, or require substantial supervision due to cognitive impairment.
5. Beneficiary not more than 10 years younger than the decedent — covers siblings close in age, certain domestic partners, and other non-spouse beneficiaries who are near peers in age.

EDB status is determined as of the date of the decedent's death. A beneficiary cannot become an EDB retroactively, and the status applies to the beneficiary's relationship at that specific moment.

The question most people miss: do you owe annual RMDs?

The 2024 IRS final regulations (T.D. 10001) answered the question the SECURE Act left open: do non-EDB beneficiaries owe annual RMDs during the 10-year window, or just a full depletion by year 10?³ The answer depends on one fact about the original owner.

Decedent died BEFORE their Required Beginning Date

No annual RMDs. You can withdraw any amount — including zero — in years 1 through 9, as long as the account is fully depleted by December 31 of year 10. This gives meaningful flexibility to plan around your own tax situation: withdraw nothing while your income is high, take larger distributions in a low-income year (job change, early retirement, gap year), and clear the balance before the hard deadline.

Decedent died AFTER their Required Beginning Date

Annual RMDs are required in each of years 1 through 9 of the 10-year window, AND the account must be fully depleted by December 31 of year 10.³ Annual RMD amounts for non-EDB beneficiaries are calculated using the Single Life Expectancy Table, based on your age in the calendar year after the year of the decedent's death, with the factor reduced by 1 for each subsequent year.

Missed annual RMDs trigger a 25% excise tax on the shortfall, reduced to 10% if corrected within the correction window (generally 2 years).⁴ The IRS waived these penalties for tax years 2021 through 2024 while the rules were being finalized — that relief ended. Starting with 2025 distributions, the penalty is live.

How to count your 10-year window

The 10-year window ends on December 31 of the calendar year that contains the 10th anniversary of the original owner's death — regardless of when in that year the owner died.

Year 1 of the 10-year window is the calendar year immediately following the year of death. If the balance is not zero by December 31 of year 10, the entire remaining balance becomes a taxable distribution in that year — on top of whatever other income you have that year.

Inherited Roth IRA: 10-year rule applies, but tax consequence is different

Non-spouse, non-EDB beneficiaries of inherited Roth IRAs are also subject to the 10-year depletion rule.¹ The important difference: qualified Roth distributions are income tax-free. The "compressed tax bomb" of the 10-year rule is largely a non-issue for inherited Roth IRAs — you can let the account compound tax-free for the full 10 years and take a lump distribution in year 10 with no income tax due.

Annual RMDs are NOT required for inherited Roth IRAs during the 10-year window, even if the original Roth owner died past their nominal RBD. Roth IRA owners were not subject to RMDs during their lifetime — so the T.D. 10001 annual-RMD rule does not extend to inherited Roth IRAs. Only a full depletion by year 10 is required.

What the 10-year rule costs in real dollars

Example: a 48-year-old inherits a $750,000 traditional IRA in 2023 from a parent who had already started RMDs. The parent was past their RBD. Our inheritor:

• Earns $220,000/year — 32% marginal bracket before the inheritance
• Must take annual RMDs in years 1-9 (decedent was past RBD)
• Year-1 RMD based on Single Life Table for age 49: ~2.6% of beginning balance ≈ $19,500
• $220,000 + $19,500 = $239,500 — stays in 32% bracket
• By year 10, the account may have grown to $900,000+ after 9 years of growth minus RMDs
• If no additional planning: $900,000 in year 10, stacking on top of $220,000 earned income, pushes deep into 37% territory

The 10-year window doesn't eliminate tax — it compresses it. Planning the withdrawal schedule, coordinating with your own Roth conversions, and modeling bracket trajectory across the window is where specialists earn their value.

Three planning levers within the 10-year window

• Timing withdrawals around income gaps. Sabbatical, early retirement, post-layoff years, or years between jobs are opportunities to take larger inherited IRA withdrawals at lower marginal rates. The 10-year rule doesn't mandate a schedule (when decedent was pre-RBD) — use that flexibility.
• Coordinating your own Roth conversions. You cannot Roth-convert a non-spouse inherited IRA. But you can take annual inherited IRA distributions (paying ordinary income tax on them) while simultaneously converting funds from your own traditional IRA to Roth at a favorable rate. The inherited IRA withdrawals "use up" low-bracket space; the Roth conversions move your own retirement assets into tax-free territory for the long run.
• Charitable strategies. If you have charitable intent, Qualified Charitable Distributions (QCDs) allow IRA owners age 70½+ to direct up to $111,000/year (2026) from their own IRA directly to qualified charities, tax-free.⁶ You cannot make QCDs from an inherited IRA — but if taking large inherited IRA distributions bumps your income, coordinating QCDs from your own IRA can offset the added AGI.

Sources

1. IRC § 401(a)(9)(H) — SECURE Act 10-year rule for post-2019 deaths; § 401(a)(9)(E)(ii) — Eligible Designated Beneficiary definitions. Enacted as part of the Setting Every Community Up for Retirement Enhancement (SECURE) Act of 2019, P.L. 116-94.
2. IRS Retirement Topics — Beneficiary. Minor-child EDB treatment: stretch applies until the age of majority; the 10-year clock then begins.
3. T.D. 10001 — Final Regulations on Required Minimum Distributions (July 2024). Established the annual RMD requirement in years 1–9 for non-EDBs when the decedent died after their Required Beginning Date.
4. IRS RMD FAQs. Missed RMD excise tax: 25% of amount not taken; reduced to 10% if corrected within approximately 2 years. IRS penalty relief for 2021–2024 (Notices 2022-53, 2023-54, 2024-35) has ended; penalties apply beginning with the 2025 distribution year.
5. IRS — SECURE 2.0 Required Beginning Date: age 73 for those born 1951–1959; age 75 for those born 1960 or later.
6. IRS — Qualified Charitable Distributions (QCDs): $111,000 annual limit for 2026. QCDs are available from the IRA owner's own account; not permitted from inherited IRAs.

Tax laws and IRS regulations verified as of April 2026. Inherited-IRA rules are unusually technical and changed substantially in 2024 — confirm your specific situation with a qualified advisor before acting.