Pre-2020 Inherited IRA: The Complete Guide

Who This Guide Is For

You inherited an IRA from someone who died before January 1, 2020.

That's the cutoff. The SECURE Act's 10-year rule only applies to IRAs inherited from someone who died on or after that date. If the original owner died in 2019 or earlier, the old rules apply for the life of the inherited account.

This is true regardless of when you set up the inherited IRA or when you started taking distributions. What matters is the date of death.

The Stretch IRA: How It Worked

Before the SECURE Act, any designated beneficiary could stretch distributions from an inherited IRA over their own life expectancy. This was the "stretch IRA" strategy, and it was one of the most powerful tools in retirement and estate planning.

Here's why it mattered. A 35-year-old inheriting a $500,000 Traditional IRA could take small annual distributions over the next 48+ years. Most of the account stayed invested and continued growing tax-deferred. The required annual withdrawal in year one might be around $10,300. The rest kept compounding.

Compare that to the current 10-year rule, where the entire balance must come out within a decade. The stretch allowed beneficiaries to minimize the annual tax hit while maximizing decades of tax-deferred growth.

How RMDs Are Calculated: The Reduce-by-One Method

For most non-spouse beneficiaries of pre-2020 inherited IRAs, annual RMDs are calculated using the Single Life Expectancy Table and the reduce-by-one method.

Step 1: Find Your Starting Life Expectancy Factor

Look up your age in the year following the original owner's death on the IRS Single Life Expectancy Table. That gives you your initial life expectancy factor.

Example: The original owner died in 2018. You were 40 years old in 2019 (the year after death). The Single Life Expectancy Table shows a factor of 43.6 for age 40.

Step 2: Divide the Account Balance by the Factor

Take the inherited IRA's balance as of December 31 of the prior year and divide by your life expectancy factor.

Example: The account balance on December 31, 2018, was $500,000. Your RMD for 2019 is $500,000 ÷ 43.6 = $11,468.

Step 3: Reduce the Factor by One Each Year

Every year after that, subtract 1 from the prior year's factor. You do not look up a new factor in the table. You just reduce by one.

Example: In 2020, your factor is 42.6. In 2021, it's 41.6. In 2022, it's 40.6. And so on. Each year, divide the prior December 31 balance by the current year's factor to get that year's RMD.

The IRS Updated the Tables in 2022

The IRS released new life expectancy tables effective January 1, 2022. If you were already taking RMDs from an inherited IRA, you got a one-time reset.

For the 2022 RMD calculation, you looked up your age in the new Single Life Expectancy Table, then subtracted the number of years that had already elapsed since your first RMD year. That gave you an updated factor. From there, you continue reducing by one each year.

Example: You started in 2019 at age 40 with a factor of 43.6 under the old table. By 2022, your old factor would have been 40.6 (43.6 minus 3). Under the new table, the factor for age 40 is 44.4. Subtract the 3 elapsed years: 44.4 − 3 = 41.4. That's your 2022 factor. Continue reducing by one from there.

Surviving Spouse Rules (Pre-2020)

Surviving spouses who inherited before 2020 had the most flexibility. The options were:

Treat It as Your Own

Roll the inherited IRA into your own IRA. The account becomes yours — your RMD age, your rules, your beneficiary designations. Same as today's surviving spouse rollover option.

Remain a Beneficiary and Recalculate

Unlike non-spouse beneficiaries who use the reduce-by-one method, surviving spouse beneficiaries who stayed on as beneficiaries could recalculate their life expectancy each year. Instead of subtracting one from last year's factor, you look up a new factor in the Single Life Expectancy Table each year based on your current age.

Recalculation results in smaller RMDs because you're using a fresh factor every year rather than a steadily declining one. This keeps more money in the account longer.

Delay Until the Deceased Would Have Reached 70½

If the original owner died before reaching 70½ (the old RMD age before the SECURE Act), the surviving spouse could delay distributions until the year the deceased would have turned 70½.

Non-Spouse Beneficiary Rules (Pre-2020)

Owner Died Before Their Required Beginning Date

If the original owner died before they were required to start taking RMDs (generally before age 70½ for pre-2020 deaths), non-spouse beneficiaries had two options:

Life expectancy method (the stretch): Take annual RMDs over your own life expectancy using the Single Life Expectancy Table with the reduce-by-one method. First RMD is due by December 31 of the year after the year of death.

5-year rule: Withdraw the entire balance by December 31 of the 5th year following the year of the owner's death. No annual minimums required during those 5 years, but the account must be empty by the deadline.

Most people chose the life expectancy method because it maximized tax-deferred growth. The 5-year rule was typically used only when the beneficiary wanted the money sooner or the account balance was small enough that spreading it out didn't matter.

Owner Died On or After Their Required Beginning Date

If the original owner had already started taking RMDs (died at 70½ or older, generally), non-spouse beneficiaries had to take annual distributions based on the longer of:

• The beneficiary's own life expectancy (reduce-by-one method), or
• The remaining life expectancy of the deceased owner (also reduce-by-one, using the owner's age in the year of death)

The beneficiary used whichever factor produced a longer stretch (smaller annual RMDs). In most cases, a younger beneficiary's own life expectancy was longer. But if the beneficiary was older than the deceased, the deceased's remaining life expectancy was used instead.

The Year-of-Death RMD

If the original owner died during a year in which they owed an RMD but hadn't taken it yet, the beneficiary must take that RMD. This is the deceased's RMD for the year of death, calculated using the deceased's age. It must be taken by December 31 of the year of death.

No Designated Beneficiary (Pre-2020)

If the original owner died before 2020 without naming a designated beneficiary (the account went to the estate, or a non-person entity like a charity was named), the rules were:

• Died before the required beginning date: The 5-year rule applies. The entire balance must be distributed by December 31 of the 5th year after the year of death.
• Died on or after the required beginning date: Distributions are taken over the remaining life expectancy of the deceased owner, using the owner's age in the year of death and the reduce-by-one method.

For more on how estates, trusts, and charities are treated as IRA beneficiaries, see our Inherited IRA (Non-Person Beneficiary) guide.

Inherited Roth IRA (Pre-2020)

Roth IRAs had no required beginning date for the original owner (no lifetime RMDs). For pre-2020 inherited Roth IRAs, the rules were:

• Designated beneficiary: Could stretch distributions over their own life expectancy using the Single Life Expectancy Table. Distributions are generally tax-free, assuming the original owner's Roth IRA met the 5-year rule.
• No designated beneficiary: The 5-year rule applied. Account had to be emptied within 5 years.

What Can Go Wrong

Missing an Annual RMD

If you miss your annual RMD, the penalty is 25% of the shortfall. If you correct it within two years and file Form 5329, it drops to 10%. The IRS may waive the penalty entirely if you can show reasonable cause, but don't count on it.

Your custodian may calculate your RMD for you, but they're not required to. Some do. Some don't. The legal responsibility is yours.

Using the Wrong Table or Wrong Method

Non-spouse beneficiaries use the Single Life Expectancy Table with the reduce-by-one method. Surviving spouses who remain beneficiaries can recalculate annually. If you're a non-spouse beneficiary recalculating each year instead of reducing by one, your RMDs are too small and you'll owe a penalty on the shortfall.

Forgetting the 2022 Table Reset

If you've been using the old (pre-2022) life expectancy factors without adjusting for the updated tables, your RMDs have been slightly wrong since 2022. The amounts are close, so this may not trigger a penalty, but it's worth correcting.

Contributing to the Account

You can't add money to an inherited IRA. Period. Not under the old rules, not under the new rules, not ever.

Commingling Inherited IRAs

You cannot combine an inherited IRA with your own IRA. They must remain separate. However, if you inherited multiple IRAs from the same person, you can combine those into a single inherited IRA.

If you inherited IRAs from different people, each must remain separate with its own RMD calculation.

Not Taking the Year-of-Death RMD

If the original owner owed an RMD for the year they died and hadn't taken it, you owe it. This is their RMD, not yours. It's calculated based on the deceased's age and the account balance. Beneficiaries miss this one constantly.

Assuming the SECURE Act Changed Your Rules

If the original owner died before January 1, 2020, the 10-year rule does not apply to you. Some custodians and even some advisors get this wrong. If anyone tells you that you need to empty your pre-2020 inherited IRA within 10 years, push back. Your account is grandfathered.

When the Stretch Ends

Eventually, the reduce-by-one method will bring your life expectancy factor to zero. At that point, the account must be fully distributed. For a young beneficiary, this could be 40 or 50 years in the future. For an older beneficiary, the timeline is shorter.

If you die before the account is empty, it passes to your successor beneficiary. The successor beneficiary continues the original stretch schedule — they do not get a new life expectancy calculation. They pick up where you left off with the remaining reduce-by-one factor.

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