Inherited IRA 10-year rule.

In plain English

When you inherit an IRA from someone who is not your spouse, the SECURE Act generally requires you to empty the whole account within 10 years of the year the original owner died. This replaced the older 'stretch IRA', which let heirs spread withdrawals over their own lifetime. Some heirs are exempt and can still stretch withdrawals, including a surviving spouse, a minor child of the owner, someone disabled or chronically ill, or an heir less than 10 years younger than the owner. For a traditional inherited IRA, every dollar you withdraw is taxable income, so the 10-year deadline can push you into higher tax brackets if you wait and take it all at once. Under the IRS final regulations, if the original owner had already started their own required minimum distributions, a non-exempt heir also has to take a required minimum distribution each year during the 10-year window, not just empty the account by year 10; if the owner died before starting those distributions, only the year-10 deadline applies.

01Why it matters

If you inherit a traditional IRA and ignore the clock, you can face a large taxable lump sum in year 10 plus possible penalties, so spreading withdrawals across the decade on purpose can save real money.

02The math, step by step

Sam inherits a $100,000 traditional IRA from his father. Under the 10-year rule he must withdraw all of it by the end of the tenth year after his father's death. Instead of taking it all at once, Sam pulls out roughly $10,000 a year so the added taxable income stays small each year. Because his father had already begun his own required minimum distributions before he died, Sam also has to take at least a required minimum amount each year along the way, not just clear the account by year 10.

03What this is NOT

04Receipts

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