A retirement-account rule that took years to fully take effect is now firmly in force, and it changes the math for a common family event: inheriting an IRA. Anyone who receives a traditional IRA or workplace retirement account from someone other than a spouse — a parent, a sibling, a friend who named them as beneficiary — generally must withdraw the entire balance within ten years of the original owner’s death. For heirs used to the old rules that let inherited accounts stretch across a lifetime, the compressed window changes both when the money arrives and how much of it survives taxes.
A Full Payout Within a Decade, Not a Lifetime
Under the SECURE Act, retirement accounts left to most non-spouse beneficiaries when the original owner died after December 31, 2019, must be fully distributed by the end of the tenth year following the death, according to the IRS’s chart of required minimum distributions for IRA beneficiaries. That replaced a long-standing option that allowed many heirs to stretch withdrawals, and the taxes owed on them, over their own life expectancies.
The ten-year clock applies whether the original owner died before or after the age at which they would have had to start taking their own required withdrawals. There is no mandate to take equal amounts in each of the ten years by default; a beneficiary can wait, front-load withdrawals, or spread them evenly, as long as nothing remains in the account after year ten.
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Which Heirs Are Exempt From the Countdown
Not every beneficiary faces the ten-year deadline. A category the IRS calls “eligible designated beneficiaries” can still stretch withdrawals over their own life expectancy: a surviving spouse, a minor child of the original account owner, a beneficiary who is disabled or chronically ill, and an heir who is not more than ten years younger than the original owner. Details on how each category is defined and documented appear in the IRS’s retirement topics guidance on beneficiaries.
The minor-child exemption is temporary rather than permanent. Once that child reaches the age of majority, the ten-year clock begins running for the remaining balance, converting what looked like a lifetime stretch into a delayed decade.
The Annual-Withdrawal Trap Inside the Ten Years
A detail that catches many families off guard involves what happens inside the ten-year window, not just at its end. If the original owner had already reached their required beginning date — meaning they had started, or were required to start, their own withdrawals before dying — most non-spouse beneficiaries must also take annual required minimum distributions in years one through nine, not simply empty the account with a single withdrawal in year ten. The IRS confirmed in its required minimum distribution FAQ page that this annual requirement, delayed while final regulations were being written, has applied since the 2025 distribution year. Beneficiaries who skip a required annual withdrawal risk an excise tax on the shortfall, reduced to 10 percent if corrected within two years.
By contrast, a beneficiary whose benefactor died before reaching their required beginning date has more flexibility: no annual withdrawals are mandated, and the entire balance can be taken in a single distribution any time before the ten-year deadline, including a lump sum in the final year.
Why the Tax Bill Grows if Heirs Wait
Distributions from an inherited traditional IRA count as ordinary taxable income in the year they are taken. A beneficiary who lets the balance sit and then withdraws everything in year ten can spike a single year’s income enough to jump tax brackets, and for beneficiaries who are themselves near Medicare enrollment age, a large one-time withdrawal can also raise Medicare premiums two years later through income-related surcharges. Spreading withdrawals across more of the available decade, rather than deferring them to the deadline, is the approach many tax professionals point to for keeping each year’s taxable income closer to a beneficiary’s regular bracket.
This article was produced with AI assistance and reviewed by The Financial Wire editorial team.
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David M. Keller is a finance writer based in Columbus, Ohio, covering personal finance and consumer-focused economic topics. He earned his degree in journalism from Ohio University and began his career reporting on local business and economic trends for a regional media outlet. Since then, he has contributed to a variety of online publications, focusing on clear, practical coverage of topics such as cost of living, debt, and everyday financial decision-making.
