Post-SECURE rules
Inherited IRA Rules 2026: The 10-Year Rule, Annual RMDs, and EDBs
The SECURE Act of 2019 eliminated the Stretch IRA for most non-spouse beneficiaries. The 2024 IRS final regulations then clarified when annual RMDs are required within the 10-year window. If you inherited an IRA in 2020 or later, this page explains exactly what rules apply to you.
The Big Picture: SECURE Act Eliminated the Stretch IRA
Before January 1, 2020, non-spouse beneficiaries could take RMDs from an inherited IRA spread over their own life expectancy. A 30-year-old inheriting a $500,000 IRA could stretch distributions over 50+ years, keeping most of the balance growing tax-deferred.
The SECURE Act eliminated this for most beneficiaries who inherit in 2020 or later. Most non-spouse heirs must now empty the inherited IRA within 10 years of the original owner’s death. The tax bill that results from this compressed timeline can be substantial for large inherited IRAs.
2024 IRS Final Regulations
The 10-Year Rule: Two Different Scenarios
Owner died BEFORE Required Beginning Date (RBD)
No annual RMDs required within the 10 years. You can take distributions on any schedule within the 10-year window, or wait and take the entire balance in year 10. The only requirement: the account is fully distributed by December 31 of the 10th year after death.
Owner died AFTER Required Beginning Date (RBD)
Annual RMDs ARE required within the 10 years. You must take at least the annual RMD each year (calculated using the original owner’s remaining life expectancy in year 1, then reduced by 1 each year). The account must ALSO be fully distributed by the 10th anniversary.
Required Beginning Date (RBD): April 1 of the year after the owner would have been required to start RMDs (April 1 of the year after they turn 73 or 75). An owner who died at 72 (before RMD age) died before RBD. An owner who died at 76 (after starting RMDs) died after RBD.
Penalty waivers for 2020-2024: The IRS waived the penalty for missing annual RMDs in inherited IRAs for 2020-2024 (via multiple notices). Starting with 2025 distributions, the annual RMD requirement is enforced at 25% penalty (10% if corrected within 2 years).
Source: IRS Final Regulations July 2024 (TD 9988), IRS Notice 2024-35.
Eligible Designated Beneficiaries (EDBs): Lifetime Stretch Exceptions
Five categories of beneficiaries retain the lifetime stretch IRA (not subject to the 10-year rule):
Surviving spouse
Best flexibility. Can treat inherited IRA as own (roll in), remain as inherited IRA beneficiary, or use 10-year rule. Key consideration: rolling into own IRA makes you subject to your own RMD rules, not the 10-year rule.
Minor child of the decedent
Not just any minor - must be the deceased's own child. Lifetime stretch applies until the child reaches age of majority (age 21). Then the 10-year rule kicks in for remaining balance.
Disabled beneficiary
Disability as defined in IRC Section 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 indefinite or fatal.
Chronically ill beneficiary
Defined under the qualified long-term care services definition. Unable to perform at least 2 ADLs (activities of daily living) for at least 90 days, or requires substantial supervision due to cognitive impairment.
Any individual not more than 10 years younger
Allows siblings, friends, or other individuals close in age to use the lifetime stretch. This exception is age-based, not relationship-based. A beneficiary born within 10 years of the decedent qualifies.
Spousal Inherited IRA: Three Options
Roll into own IRA
Best for most surviving spouses. Treats inherited IRA as your own. Subject to your own RMD start age (73 or 75 based on your birth year). Can contribute to it if you have earned income. Risk: must be at least 59.5 to withdraw without penalty (unless exception).
Stay as inherited IRA (beneficiary IRA)
Keeps the account titled as 'inherited.' Can take distributions based on the deceased spouse's RMD schedule (if they had started RMDs) or the surviving spouse's life expectancy. Advantage: if you are under 59.5, you can take distributions penalty-free as a beneficiary (not subject to the 59.5 rule).
10-year rule
A surviving spouse can also elect the 10-year rule like any non-EDB beneficiary. Usually not the best choice, but sometimes applies if the inherited account is small and the spouse prefers to simplify.
Inherited Roth IRA: The Best Inheritance
The 10-year rule applies to inherited Roth IRAs for non-spouse, non-EDB beneficiaries as well. But the tax treatment is fundamentally different: Roth distributions are tax-free (assuming the original owner had the Roth open for 5+ years). This means you can let an inherited Roth grow for 10 years and take the entire balance in year 10 completely tax-free.
Additionally, inherited Roth IRAs have no annual RMD requirements (Roth has no RMDs at all, even in inherited accounts). Even if the original owner died after their would-be RBD, the beneficiary of a Roth IRA faces no annual RMDs, only the 10-year final distribution deadline.
For beneficiaries, an inherited Roth IRA is significantly more favorable than an inherited Traditional IRA. This is one more reason for high-balance IRA owners to consider Roth conversions for estate planning.
Distribution Strategies for Beneficiaries
Spread distributions across 10 years. If you take the entire balance in year 10, the sudden income spike could push you into a higher bracket, trigger IRMAA, reduce ACA subsidies, or subject you to the Net Investment Income Tax (3.8%). Spreading distributions avoids these cliff effects.
Take larger distributions in low-income years. If you have years of sabbatical, low-income work, or school within the 10-year window, take larger distributions in those years to pay tax at a lower rate.
You cannot convert an inherited Traditional IRA to Roth. Non-spouse beneficiaries cannot convert an inherited IRA. The money must come out as taxable income. Only a surviving spouse who rolls the inherited IRA into their own IRA can then do conversions.
Watch the 10th-year deadline strictly. The final distribution must be completed by December 31 of the 10th year after death (not the 10th anniversary of the date of death specifically, but December 31 of the year containing the 10th anniversary). Late distribution penalties are 25% of the shortfall.