Inheriting a parent’s traditional IRA once came with a quiet advantage: an heir could stretch withdrawals, and the taxes on them, across a lifetime. That option is largely gone. Under the SECURE Act, most adult children and other non-spouse heirs must now drain an inherited IRA within 10 years, and because every dollar pulled from a traditional account is taxable income, the compressed timeline can shove a beneficiary into a higher tax bracket during years they may least expect it.
Who the 10-year rule actually covers
The change applies to accounts inherited from owners who died after December 31, 2019. For most non-spouse beneficiaries, the entire balance must be distributed by the end of the tenth year following the year of death. The Internal Revenue Service lays out the framework in its guidance on required minimum distributions for IRA beneficiaries, which replaced the old lifetime “stretch” for this group.
A narrower set of heirs, called eligible designated beneficiaries, can still spread distributions over life expectancy. That group includes a surviving spouse, a minor child of the account owner (until the child reaches majority), a disabled or chronically ill person, and a beneficiary not more than 10 years younger than the deceased. Everyone else, the typical adult child inheriting from a parent, falls under the 10-year clock.
How the balance comes out within those 10 years depends on a second detail: whether the original owner had already reached the age when withdrawals become mandatory. That required beginning date is tied to the RMD age, which is now 73 for those reaching it in recent years.
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When annual withdrawals are also required inside the window
The 10-year rule is not always a simple “empty it by year 10.” If the account owner died on or after their required beginning date, most non-spouse heirs must take an annual required minimum distribution in years one through nine and clear the remaining balance by year 10. If the owner died before that date, the heir can choose the timing within the decade, as long as the account is empty by the deadline. The IRS spells out the distinction in its required minimum distribution FAQs.
The stakes for getting it wrong are real. A missed required distribution triggers an excise tax of 25 percent of the amount that should have been withdrawn, reduced to 10 percent if the shortfall is corrected within a set window. Detailed rules and worksheets appear in IRS Publication 590-B, which walks through how beneficiaries calculate each year’s minimum.
Roth IRAs follow the 10-year emptying rule too, but with a crucial difference: qualified Roth withdrawals are tax-free, so the bracket problem that haunts traditional-account heirs generally does not apply. The pain is concentrated in pre-tax accounts, where every distribution counts as ordinary income.
A surviving spouse sits in a category of their own. Rather than being forced onto the 10-year clock, a widow or widower can generally treat an inherited IRA as their own, rolling it into a personal account and taking distributions on the ordinary schedule tied to their own age. That flexibility is one reason spouses are carved out of the rule that binds children and other heirs, and it can preserve years of continued tax-deferred growth that a non-spouse beneficiary no longer enjoys.
Why the timing can inflate a beneficiary’s tax bill
The bracket risk comes from stacking. An heir in their fifties, still earning a full salary, who inherits a sizable traditional IRA must layer those distributions on top of wages. Waiting until year 10 to take one large withdrawal can spike taxable income into a higher marginal rate, and can ripple into other calculations, from the taxation of Social Security benefits to Medicare premium surcharges for those already in retirement.
Spreading withdrawals more evenly across the decade often blunts that spike, letting a beneficiary fill up lower brackets each year rather than absorbing one large hit. The right pattern depends on an heir’s own income trajectory, expected retirement date, and whether earnings are likely to fall in later years. A beneficiary who plans to retire during the 10-year window, for instance, might weight withdrawals toward the low-income years after leaving work, when the same dollars are taxed at a gentler rate.
State income tax adds another layer that the federal rules do not capture. An heir living in a high-tax state pays that state’s rate on every distribution, and someone planning a move to a lower-tax or no-income-tax state may find that the timing of a large withdrawal, before or after the relocation, changes the total owed by thousands of dollars. The 10-year deadline sets the outer boundary, but within it the sequence of withdrawals is a decision with real money attached.
For account owners still living, the rules reshape estate planning. Some choose Roth conversions during their own lifetime, paying tax at their rate so heirs inherit tax-free dollars. Others weigh charitable strategies; owners age 70 and a half or older can direct money straight to charity through a qualified charitable distribution, capped at $111,000 for 2026, as the IRS describes in its reminder on qualified charitable distributions. The through-line for anyone inheriting under the new regime is that the 10-year clock and the tax code are linked, and the year a distribution lands determines how much of it survives to the next generation.
This article was created with AI assistance and was reviewed, edited, and fact-checked 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.
