Inherited IRA Rules: The 10-Year Rule, RMDs, and Spouse Options

An inherited IRA is the account you set up to hold retirement money you receive when the original owner dies. It is not your own IRA, and the rules that govern it changed substantially under the SECURE Act for deaths after 2019. The headline change is the 10-year rule: most non-spouse beneficiaries must now empty the inherited account by the end of the tenth year after the owner's death, rather than stretching withdrawals across their own lifetime. This guide explains who that rule applies to, when annual required minimum distributions (RMDs) are also required inside that window, the separate set of choices a surviving spouse has, and the tax mistakes that cost beneficiaries the most. Tax rules change and the details are fact-specific, so confirm current rules with the IRS or a qualified professional before acting.

The stakes are real. An inherited traditional IRA is generally fully taxable as you withdraw it, so the timing of withdrawals can change your tax bill by a large amount. Getting the mechanics right is often worth more than any investment decision inside the account.

Who Counts as Which Type of Beneficiary

The rules turn entirely on what kind of beneficiary you are. The SECURE Act created three broad categories.

• Eligible designated beneficiaries (EDBs). A narrower group who can still stretch distributions over their own life expectancy. EDBs are: the surviving spouse, a minor child of the account owner (only until the age of majority, after which the 10-year clock starts), a beneficiary who is disabled or chronically ill (as defined by the IRS), and a beneficiary who is not more than 10 years younger than the owner.
• Designated beneficiaries. Most other individuals named on the account, for example an adult child, a grandchild, or a friend. These beneficiaries are subject to the 10-year rule.
• Non-designated beneficiaries. Estates, most trusts that do not qualify for look-through treatment, and charities. These follow older, separate rules (generally a 5-year rule or payout based on the owner's remaining life expectancy, depending on circumstances).

Identifying your category is the first step, because everything else, including whether you take annual withdrawals, follows from it.

The 10-Year Rule, Explained

For a designated beneficiary, the inherited account must be fully distributed by December 31 of the tenth year following the year of the owner's death. That is the firm deadline. What happens inside those ten years depends on one further question: had the original owner already reached their required beginning date for RMDs when they died?

• Owner died before their required beginning date. There are no mandatory annual withdrawals during the ten years. You have flexibility: you can take nothing until year ten, spread withdrawals out, or take it all early, as long as the account is empty by the deadline.
• Owner died on or after their required beginning date. The IRS final regulations issued in 2024 confirmed that you must take an annual RMD in years one through nine and empty the account by the end of year ten. In other words, you do not get to defer everything to the last year.

This second point was genuinely unsettled for several years. The IRS provided penalty relief for missed annual RMDs in 2021 through 2024 while the question was open, and the final regulations established that the annual-RMD requirement applies going forward. If you inherited from someone who had already started RMDs, do not assume you can wait until year ten; check whether annual distributions are now required.

For background on when the original owner's RMDs begin, see our guide to required minimum distribution age.

Why the Timing Decision Matters So Much

Even when annual RMDs are not strictly required, how you spread the withdrawals is one of the most consequential tax decisions you will make. Because each dollar from an inherited traditional IRA is generally taxable as ordinary income, dumping the whole balance into a single year can push you into higher brackets, while spreading it evenly can keep more of it taxed at lower rates.

A simple illustration of the principle (figures are illustrative, not advice): a beneficiary who inherits a sizeable traditional IRA and waits until year ten to withdraw everything could face a large one-year spike in taxable income. The same person taking roughly level withdrawals across all ten years might keep each year's income in a lower bracket. The right pattern depends on your other income, expected future tax rates, and whether you have high-income or low-income years ahead. This is the same bracket-management logic discussed in our retirement tax strategies guide.

A few planning levers worth knowing:

• Take more in years when your other income is low (a gap year, early retirement before Social Security and other RMDs begin).
• Take less in years when you are already in a high bracket.
• Remember that inherited IRA withdrawals can interact with other thresholds, such as the taxation of Social Security and income-related Medicare premium surcharges.

Special Rules for a Surviving Spouse

A surviving spouse has the most flexibility of any beneficiary, with options no one else gets.

• Treat it as your own. A spouse can roll the inherited IRA into their own IRA (or treat it as their own). The money then follows the normal rules for your account: your RMDs start at your own required age, and you can name your own beneficiaries. This is often the simplest choice for a spouse who does not need the money soon.
• Remain a beneficiary. Keep it as an inherited IRA. This can be useful if the surviving spouse is under 59½ and may need access, because withdrawals from an inherited IRA are not subject to the 10% early-withdrawal penalty.

As an eligible designated beneficiary, a spouse who keeps the account as inherited can generally stretch distributions over life expectancy rather than being forced into the 10-year rule. The right choice depends on the spouse's age relative to the deceased, whether they need access before 59½, and the tax picture. For the mechanics of moving retirement money correctly, our 401(k) rollover guide covers the same care needed to avoid a taxable mistake.

Inherited Roth IRAs Work Differently

If you inherit a Roth IRA, the 10-year rule still generally applies to non-spouse designated beneficiaries, but with an important difference: because a Roth owner is treated as having died before their required beginning date (Roth owners have no lifetime RMDs), there are no mandatory annual withdrawals during the ten years. You simply must empty the account by the end of year ten.

The bigger advantage is tax: qualified withdrawals from an inherited Roth IRA are generally income-tax-free. That changes the optimal strategy. Rather than spreading withdrawals to manage brackets, many beneficiaries prefer to leave an inherited Roth invested for the full ten years and withdraw at the end, capturing a decade of potential tax-free growth. This is one reason Roth assets are often considered the most efficient to leave to heirs, a theme we cover in the Roth conversion guide.

Mistakes That Cost Beneficiaries the Most

A handful of errors come up repeatedly, and they are expensive.

Mistake	Consequence
Rolling an inherited IRA into your own (non-spouse)	Treated as a full taxable distribution; cannot be undone
Missing a required annual RMD	Potential penalty on the shortfall (reduced under SECURE 2.0 if corrected promptly)
Forgetting the year-ten deadline	The entire remaining balance becomes taxable in one year
Withdrawing everything in one high-income year	Avoidable jump into higher tax brackets
Cashing out the whole account on receipt	Immediate full tax bill and loss of tax-deferred growth

The first one is worth emphasizing: only a surviving spouse may move inherited retirement money into their own IRA. If a non-spouse beneficiary does this, it is generally treated as a complete distribution and taxed in full, with no way to reverse it. Set up a properly titled inherited IRA and have the funds transferred directly between custodians.

For the wider context of how these accounts are taxed and structured, our overview of tax-advantaged retirement accounts is a useful companion.

Frequently Asked Questions

Do I have to take money out of an inherited IRA every year?

It depends. If you are subject to the 10-year rule and the original owner had already reached their required beginning date when they died, you generally must take an annual RMD in years one through nine and empty the account by year ten. If the owner died before that date, there are no required annual withdrawals during the ten years, only the year-ten deadline. Inherited Roth IRAs have no annual RMDs during the window. Confirm which case applies to you.

Is money from an inherited IRA taxable?

Withdrawals from an inherited traditional IRA are generally taxable as ordinary income, just as they would have been for the original owner. Qualified withdrawals from an inherited Roth IRA are generally tax-free. Inherited IRA distributions are not subject to the 10% early-withdrawal penalty, regardless of your age.

Can I combine an inherited IRA with my own IRA?

Only a surviving spouse can effectively do this by treating the inherited IRA as their own. A non-spouse beneficiary cannot, and attempting to roll an inherited IRA into a personal IRA is generally treated as a full taxable distribution. Non-spouse beneficiaries must keep the money in a separate, properly titled inherited IRA.

What happens if I miss the 10-year deadline?

If the account is not emptied by December 31 of the tenth year, the remaining balance is generally treated as a distribution and taxed accordingly, and a penalty can apply to amounts that should have been withdrawn. SECURE 2.0 reduced the penalty for missed RMDs and allows a smaller penalty if the shortfall is corrected within a set window. Acting promptly to correct any miss is important.

This article is educational and not personal financial or tax advice. Inherited IRA rules are detailed, depend on your specific circumstances, and change over time; confirm the current rules and your options with the IRS or a qualified tax professional before acting.