Inheriting an IRA comes with strict distribution rules that depend on your relationship to the deceased, when they died, and whether they had already started required minimum distributions. Getting the rules wrong can mean large penalties.
Who Inherited the IRA Determines the Rules
The SECURE Act (2019) created a two-tier system: Eligible Designated Beneficiaries (EDBs) with flexible rules, and all other non-spouse beneficiaries subject to the 10-year rule.
Surviving Spouse: Most Flexibility
A surviving spouse has the most options:
| Option | How It Works |
|---|---|
| Spousal rollover | Roll into own IRA — treated as if it was always theirs. Own RMD rules apply. |
| Remain as inherited IRA | Delay RMDs until spouse would have turned 73 (if owner died before RMDs started) |
| Take distributions | Can take over owner’s lifetime RMD schedule |
Best option for most spouses: The spousal rollover. It maximizes flexibility, eliminates inherited IRA restrictions, and allows continued contributions if spouse is still working.
Non-Spouse Eligible Designated Beneficiaries (EDBs)
EDBs can stretch distributions over their life expectancy using the Single Life Expectancy table:
| Who Qualifies as EDB |
|---|
| Surviving spouse |
| Minor child of the account owner |
| Person with a disability |
| Chronically ill individual |
| Person no more than 10 years younger than the account owner |
Minor child exception: Once the child reaches the age of majority (18, or 26 if still in school depending on plan), the 10-year rule kicks in. The clock starts when they reach majority — not at the account owner’s death.
The 10-Year Rule for Other Beneficiaries
All other beneficiaries — adult children, siblings, non-spouse partners, trusts — must empty the inherited IRA within 10 years of the account owner’s death.
Annual RMD requirement (IRS 2024 finalized rules):
- If the original owner had already started RMDs → you must also take annual RMDs each year for 10 years, with the account emptied by year 10
- If the original owner had not yet started RMDs → no annual requirement; you can withdraw at any pace, as long as the account is empty by December 31 of the 10th year
Year of Death RMD
If the original owner died after their required beginning date (the year they turned 73), they had an RMD due for the year of death. If they did not take it before dying, you as the beneficiary must take that year’s RMD by December 31 of the death year. Failing to do so incurs the standard missed RMD penalty.
Inherited Roth IRA Rules
Inherited Roth IRAs are also subject to the 10-year rule for non-EDB beneficiaries — but withdrawals are generally tax-free since the original owner already paid taxes. There are no annual RMD requirements during the 10-year period for inherited Roth IRAs (since the original owner never had RMDs during their lifetime). The full account just needs to be distributed by the end of year 10.
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