The Inherited IRA 10-Year Rule: A Complete 2026 Guide

What the 10-Year Rule Is

Before the SECURE Act, most inherited IRAs could be "stretched" over the beneficiary's lifetime — a powerful long-term tax deferral strategy. The SECURE Act, effective for deaths after December 31, 2019, eliminated this for most beneficiaries.¹

Under IRC § 401(a)(9)(H), most non-spouse beneficiaries must fully deplete an inherited traditional IRA, Roth IRA, 401(k), or 403(b) by December 31 of the 10th year following the year of the account owner's death. Under the base rule, you can choose any distribution pattern you like — $0 in years 1 through 9 and everything in year 10, or even annual withdrawals, or any other pattern — as long as the account is empty by the deadline.

Example: Your father dies in June 2025 at age 68. You inherit his $800,000 traditional IRA. Your 10-year window closes December 31, 2035. The full balance (plus any growth) must be distributed by then.

Who Is Exempt: Eligible Designated Beneficiaries (EDBs)

Five categories of "Eligible Designated Beneficiaries" may still use the old lifetime-stretch method and are not subject to the 10-year rule:¹

• Surviving spouse — may roll the IRA into their own IRA (treating it as their own) or keep it as an inherited IRA with lifetime RMDs using their own age. Rolling into your own IRA is almost always superior for younger surviving spouses because it delays your own RBD and offers more distribution flexibility.
• Minor children of the decedent — biological or legally adopted children only; not grandchildren. They can stretch until reaching the age of majority (18 in most states, 21 in some), at which point the 10-year clock starts for the remaining balance.
• Disabled individuals — per the definition in IRC § 72(m)(7). Must be unable to engage in any substantial gainful activity due to a medically determinable physical or mental impairment expected to be long-term or fatal.
• Chronically ill individuals — per the definition in IRC § 7702B(c)(2). Requires certification by a licensed health care practitioner.
• Any individual not more than 10 years younger than the account owner — calculated by calendar year of birth, not age. A sibling born in 1962 inheriting from a sibling born in 1950 is exactly 12 years younger — not an EDB. The cutoff is strict.

If you qualify as an EDB, you take annual RMDs over your life expectancy using the IRS Single Life Table from Publication 590-B. This can spread the taxable income over 30+ years and dramatically reduce the lifetime tax burden compared to the 10-year rule.

When Annual RMDs Are Required Within the 10-Year Window

This is the most widely misunderstood part of the current rules. When the 10-year rule was first enacted, many advisors told clients they could simply wait and take everything in year 10. IRS final regulations published in July 2024 clarified that this is not always true:²

What is the Required Beginning Date?

Under SECURE 2.0 (§ 107), the Required Beginning Date is April 1 of the calendar year following the year you turn:³

• Age 73 — if born between January 1, 1951 and December 31, 1959
• Age 75 — if born on or after January 1, 1960

Practical example: Your mother was born in 1950 and died at 75 in 2025. She was required to start RMDs at 73 (in 2023), so she died after her RBD. You must take annual RMDs from your inherited IRA in years 1 through 9 — you cannot skip to year 10.

Contrast: Your father was born in 1962 and died unexpectedly at 62 in 2025. His RBD won't arrive until age 75 (in 2037). He died well before his RBD, so you face no annual RMD requirement — full flexibility to choose any distribution pattern over the 10 years.

Calculating your annual RMD

When annual RMDs are required, the calculation works as follows: divide the account's December 31 prior-year balance by your Single Life Table factor from IRS Publication 590-B. Each year, reduce your factor by 1.0 (you don't reset to your new age — you continue from your starting factor minus elapsed years).

Example: You inherit at age 48. Your Single Life Table factor is 37.1 in year 1. The inherited IRA balance is $750,000 at prior year-end. Your RMD = $750,000 ÷ 37.1 = ~$20,215. In year 2, the factor is 36.1; you divide the new balance by 36.1.

Use our Inherited IRA 10-Year Drawdown Calculator to model even vs. front-loaded vs. deferred strategies against your specific income projection.

Roth vs. Traditional Inherited IRAs: Same Clock, Different Tax Math

The 10-year rule applies to both — but the strategies are almost opposite.

Inherited Roth strategy: Since Roth IRAs have no Required Beginning Date, no annual RMDs are required in years 1–9 regardless of when the owner died. The optimal play is almost always to take $0 and let the account compound tax-free, then take the full balance in year 10. The exception: if you need the cash for a specific use that would earn less than the IRA's expected return, or if you're near an IRMAA threshold and a smaller Roth distribution now avoids a larger spike later.

Inherited traditional IRA strategy: Far more complex. Every distribution is taxable as ordinary income. The goal is to fill your lower brackets (12%, 22%) each year without triggering the 32% bracket, IRMAA surcharges, or Social Security taxation cliffs. A flat even-withdrawal approach is often not optimal — the right answer depends on your income trajectory over 10 years, Social Security timing, other account balances, and your state's tax treatment.

Tax Optimization Strategies

1. Bracket-fill distributions

Project your taxable income for each year of the 10-year window. In low-income years — early retirement, sabbatical, a year between jobs — take larger IRA distributions. In high-income years, take less. The objective is to never push into the 32% bracket if that income could be captured in a 22% year instead. The savings on a $500,000 IRA distributed efficiently vs. in a lump sum can easily exceed $75,000 in lifetime taxes.

2. Coordinate with Social Security timing

If you delay Social Security to 70 to maximize your benefit, you create a window in your early-to-mid 60s with lower taxable income — ideal for front-loading inherited IRA distributions. Taking large distributions simultaneously with full Social Security (which is partially taxable) and your own retirement account RMDs creates unnecessary bracket stacking.

3. Watch the IRMAA thresholds

If you're 63 or older (IRMAA is based on income from 2 years prior), inherited IRA distributions count as MAGI for Medicare purposes. In 2026, IRMAA surcharges kick in at $109,000 MAGI (single) and $218,000 MAGI (married filing jointly).⁴ A distribution that pushes you $1 over the first tier can add hundreds per month in Medicare premiums. Model this explicitly.

4. Qualified Charitable Distributions (QCDs) from the inherited IRA

If you are age 70½ or older, you can make Qualified Charitable Distributions directly from an inherited IRA to a qualified charity — up to $111,000 in 2026.⁵ QCDs count toward your annual RMD (if one is required) but are excluded from your taxable income entirely. For charitably inclined beneficiaries already age 70½, this is one of the most powerful inherited IRA planning tools available.

5. Don't compete with your own Roth conversions

An inherited IRA cannot be converted to a Roth IRA. But inherited IRA distributions and your own Roth conversions compete for the same bracket space in a given year. If you're converting $50,000 from your own traditional IRA to Roth and simultaneously taking a $60,000 inherited IRA distribution, you've used $110,000 of bracket capacity — likely pushing you into the 32% bracket when 22% was available. Coordinate both strategies in a single tax projection.

Common Mistakes and Penalties

Blowing past the year-10 deadline

The year-10 deadline is absolute. If any balance remains at December 31 of the 10th year, the entire remaining amount is treated as distributed to you as ordinary income in that year — a potentially massive tax spike — plus a 25% excise tax on the undistributed amount (reduced to 10% if corrected within 2 years under SECURE 2.0). There is no extension for hardship.

Skipping annual RMDs when required

If the original owner died after their RBD and you skip annual RMDs in years 1–9, you owe the 25% excise tax on each year's undistributed RMD amount. The IRS issued transition relief for 2021–2024 while the T.D. 10001 regulations were being finalized, but that relief period is over. The rules are now final and the penalties apply.

Assuming you qualify as an EDB

The "not more than 10 years younger" EDB rule is based on calendar year of birth, calculated exactly. A brother born in 1963 inheriting from a brother born in 1952 is 11 years younger — not an EDB. Confirm your status carefully. Also, the minor-child exemption applies only to biological or legally adopted children of the decedent — not grandchildren, not stepchildren unless legally adopted.

Rolling an inherited 401(k) into your own IRA

Non-spouse beneficiaries cannot roll an inherited 401(k) into their own traditional IRA. It must go to an inherited IRA (also called a beneficiary IRA). Rolling it into your own IRA would trigger immediate taxation of the entire amount as a distribution. This is one of the most costly paperwork errors in inheritance planning.

Selling inherited stock before checking step-up basis

Inherited brokerage accounts — separate from inherited IRAs — receive a step-up in cost basis to the fair market value at the date of death. Selling inherited stock before understanding the basis can create a taxable gain that didn't need to exist. (Note: IRAs have no cost basis issue since distributions are always ordinary income regardless.)

When to Involve a Specialist

The inherited IRA 10-year rule intersects with your marginal tax bracket, Social Security timing, Medicare premiums, your own retirement account RMDs, Roth conversion opportunities, charitable giving, and state taxes — all across a 10-year horizon. Most of the tax optimization is front-loaded: the first 2–3 years after inheriting are when the most important decisions get locked in.

You should work with a specialist if:

• The inherited IRA exceeds $300,000 — the tax stakes justify professional modeling
• You're unsure whether the original owner died before or after their Required Beginning Date
• You have multiple inherited accounts (traditional IRA + Roth IRA + 401(k)) with different rules
• You're approaching IRMAA thresholds ($109,000 single / $218,000 MFJ in 2026)
• You're doing Roth conversions from your own account simultaneously
• You're a surviving spouse deciding whether to roll into your own IRA or maintain as inherited
• The decedent died after their RBD and you need to calculate required annual RMDs correctly

The advisors in our network specialize in inherited IRA distribution planning and handle these situations regularly — often for the first year free as part of an engagement. The right strategy at the start of the 10-year window is worth far more than any advisory fee.

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