Inheriting a retirement account used to mean decades of tax-deferred growth. The SECURE Act of 2019 changed that for most beneficiaries — here's what you need to know.
Before 2020, most beneficiaries who inherited an IRA could stretch distributions over their own life expectancy — taking small amounts each year and letting the rest continue to grow tax-deferred. This was the "stretch IRA." The SECURE Act of 2019 (effective January 1, 2020) eliminated the stretch for most non-spouse beneficiaries, replacing it with the 10-year rule: the inherited account must be fully distributed by the end of the 10th year following the year of the original owner's death.
The 10-year rule applies to most beneficiaries who inherit in 2020 or later. But a category called Eligible Designated Beneficiaries (EDBs) is still allowed to use the old stretch rules. And surviving spouses have their own separate set of options that are often more favorable than either rule.
Adding complexity: in 2022, the IRS issued proposed regulations stating that if the original owner had already started taking RMDs, beneficiaries subject to the 10-year rule must also take annual distributions in years 1 through 9 (not just empty by year 10). The IRS waived penalties for 2021–2024 while this was being finalized — but the rule is now being enforced. Getting this wrong means missed RMDs and potential penalties.
Most non-spouse beneficiaries who inherit in 2020 or later must empty the inherited account by December 31 of the 10th year following the year of death. Example: original owner dies in 2024 → the account must be fully distributed by December 31, 2034. There is no required annual distribution — the full amount can be taken any time during the 10-year window.
If the original owner had already begun taking RMDs (i.e., was past their required beginning date), the IRS's final regulations require beneficiaries subject to the 10-year rule to also take annual distributions in years 1–9, with the remainder emptied by year 10. If the original owner had NOT started RMDs, beneficiaries only need to empty the account by year 10 with no annual requirement.
These five categories still get the stretch IRA (life expectancy distributions): (1) Surviving spouse; (2) Minor child of the deceased owner — until they reach age of majority (then 10-year rule kicks in); (3) Disabled individuals (as defined by IRS); (4) Chronically ill individuals; (5) Any beneficiary not more than 10 years younger than the deceased owner. EDB status must be established as of the date of death.
A surviving spouse has the most flexibility. They can: (A) Roll the inherited IRA into their own IRA — treated as their own, RMDs don't start until the spouse's own age 73; (B) Keep it as an inherited IRA — RMDs based on the deceased spouse's age or the surviving spouse's life expectancy (whichever is more favorable); or (C) Use the 10-year rule. Most younger surviving spouses benefit from rolling into their own IRA.
The same rules apply — most non-spouse beneficiaries must follow the 10-year rule. The critical difference: distributions from an inherited Roth IRA are generally tax-free (assuming the Roth was held at least 5 years before the owner's death). The year-10 deadline still applies, but each distribution is not a taxable event. Inheriting a Roth IRA is generally more valuable than inheriting a traditional IRA of the same size.
If you inherited an IRA before January 1, 2020, the old stretch rules continue to apply. You take RMDs annually based on your life expectancy factor from the IRS Single Life Table. SECURE Act changes do not retroactively affect these accounts. However, if a pre-2020 inherited IRA passes to a successor beneficiary (you die and it passes to your heir), the 10-year rule then applies to that successor.
No. Inherited IRAs cannot receive new contributions of any kind. You can only take distributions from them — you cannot add to the balance. This is one of the fundamental rules of inherited IRAs and applies regardless of whether you're a spouse or non-spouse beneficiary.
Yes — the same distribution rules apply to inherited Roth IRAs as to inherited traditional IRAs. Most non-spouse beneficiaries must empty the inherited Roth IRA within 10 years of the original owner's death. The key advantage is that distributions from an inherited Roth IRA are generally tax-free (provided the original Roth IRA was open for at least 5 years before the owner died).
So while you must still follow the 10-year rule, each distribution doesn't cost you income tax — making the inherited Roth IRA significantly more valuable than an inherited traditional IRA of the same balance.
If the original owner died before their Required Beginning Date (the April 1 following the year they turned 73), and you are a non-EDB beneficiary subject to the 10-year rule, the IRS does not require annual distributions. You simply need to empty the account by December 31 of the 10th year following the year of death. You can take the money all in year 10, spread it evenly, or in whatever pattern makes sense for your tax situation.
If the original owner had already started RMDs (died after their Required Beginning Date), the IRS requires annual distributions from the inherited account during years 1–9 of the 10-year window, with the remainder emptied by year 10.
Yes — this is one of the exclusive rights available only to surviving spouses. By rolling an inherited IRA into their own IRA, the surviving spouse treats it as their own account. The major benefit: RMDs don't start until the surviving spouse reaches age 73 (not the deceased spouse's age). For a younger surviving spouse who inherits a much older spouse's IRA, this can delay RMDs by many years.
Important note: non-spouse beneficiaries cannot do this. Attempting to roll an inherited IRA into a non-spouse beneficiary's own IRA is one of the most common — and costly — inherited IRA mistakes. The IRS treats it as a taxable distribution of the entire balance.
The shortfall is subject to a 25% excise tax (reduced from 50% by SECURE 2.0). The IRS waived penalties for missed inherited IRA RMDs for 2021, 2022, 2023, and 2024 while the proposed regulations were being finalized. Starting in 2025, the penalty applies in full for missed distributions.
If you missed distributions in earlier years under the 10-year rule, take the makeup amount as soon as possible and file Form 5329. The IRS has historically been willing to waive first-time penalties for reasonable cause, but waivers are not guaranteed.
The account passes to your named successor beneficiary. The IRS's final regulations generally require successor beneficiaries to continue on the same 10-year track started by the original beneficiary. The successor does not get a fresh 10-year window — they must empty the account within whatever years remain of the original 10-year period.
For inherited IRAs that were already on stretch rules pre-SECURE, a successor beneficiary who inherits after 2019 is generally required to use the 10-year rule from that point forward — effectively ending the stretch for the next generation.
Inherited IRAs have their own RMD rules — understanding general RMD mechanics is essential context.
Leaving a Roth IRA to heirs is far more valuable than leaving a traditional IRA — here's why.
Surviving spouses can roll inherited IRAs into their own — non-spouses cannot. Understand the rules before moving money.
The IRS continues to release guidance on the 10-year rule and annual RMD requirements. The Rundown covers each update as it happens.
This guide is for general education and information only. It does not provide individualized investment, tax, or legal advice, and does not establish a client relationship. Always consult your own tax professional, financial advisor, or legal counsel before making decisions about your accounts or retirement strategy.