What is the 10-year rule for inherited IRAs?

For IRA owners who died after 2019, most non-spouse beneficiaries must empty the inherited IRA by the end of the tenth year after the year of death. There is no requirement to take equal annual distributions — you can take any amount in any year, as long as the account is empty by the deadline.

Do I have to take annual RMDs from an inherited IRA?

If the original owner had reached their required beginning date (the age at which RMDs were required to start), most non-spouse beneficiaries must also take annual RMDs during the 10-year period. If the original owner had not yet reached that age, annual RMDs are not required — but the account must still be empty by year 10.

What is the penalty for missing an inherited IRA RMD?

A missed RMD can trigger a 25% excise tax on the amount that should have been distributed. The IRS reduced this penalty from 50% under the SECURE 2.0 Act. The penalty can be reduced to 10% if corrected within a two-year window.

Does the 10-year rule apply to an inherited Roth IRA?

Yes, most non-spouse beneficiaries must empty an inherited Roth IRA within 10 years. The difference is that distributions from an inherited Roth IRA are generally tax-free, because the original owner already paid tax on the contributions.

Retirement Education · Paramount Financial Group

The Inherited IRA 10-Year Rule, Explained

By Bill Wolfson, licensed insurance professional · Paramount Financial Group, Haddonfield, NJ · NJ License #1003681

Under the SECURE Act, most non-spouse beneficiaries who inherit an IRA from someone who died after December 31, 2019 must empty the account within 10 years of the original owner's death. Depending on whether the original owner had started RMDs, annual distributions may also be required during that window.

Watch: The Inheritance Tax Bomb — the 10-year rule explained.

Who the 10-year rule applies to

The 10-year rule applies to most non-spouse beneficiaries — adult children, grandchildren, siblings, and other individuals — who inherit an IRA from someone who died after December 31, 2019. Exceptions exist for:

Surviving spouses (they can roll the IRA into their own)
Minor children of the original owner (until they reach the age of majority)
Disabled or chronically ill individuals
Beneficiaries not more than 10 years younger than the original owner

These eligible designated beneficiaries can stretch distributions over their own life expectancy instead of using the 10-year rule.

The two scenarios: with and without annual RMDs

Original owner's status at death	What the beneficiary must do
Had not yet reached their required beginning date (had not started RMDs)	No annual RMDs required. The beneficiary can take any amount in any year, but must empty the account by the end of year 10.
Had reached their required beginning date (had started or was required to start RMDs)	Annual RMDs are required in years 1–9, based on the beneficiary’s life expectancy. The account must be empty by the end of year 10.

The tax planning challenge

Distributions from an inherited traditional IRA are taxed as ordinary income. If you inherit a large IRA and take it all in year 10, the entire amount is added to your income that year — potentially pushing you into a much higher bracket. Spreading distributions across the 10 years, especially in lower-income years, can reduce the total tax paid.

Inherited Roth IRA distributions are generally tax-free, but the 10-year rule still applies — the account must be empty by the deadline.

Frequently asked questions

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