Written by Stina Antonopoulos
Founder of Roots & Wealth | Retirement Income Planning | Author of What If? (Coming August 2026)

Inheriting an IRA Can Create a Tax Deadline You Didn't Expect

Receiving an inheritance is emotional enough.

Then someone tells you:

"You have 10 years to empty the IRA."

Unfortunately, that's only part of the story.

For many non-spouse beneficiaries who inherit an IRA from someone who died after 2019, the SECURE Act eliminated the old "stretch IRA" strategy and generally requires the inherited account to be fully distributed by the end of the tenth year following the owner's death.

But the exact rules depend on the circumstances.

The 10-Year Rule Isn't the Same for Everyone

For many designated beneficiaries who aren't "eligible designated beneficiaries," the inherited account must be emptied within ten years.

However, special rules apply to certain beneficiaries, including:

Surviving spouses

Minor children of the account owner

Disabled individuals

Chronically ill individuals

Certain beneficiaries who are not more than 10 years younger than the deceased owner

Those exceptions matter.

Do You Have to Take Money Out Every Year?

Sometimes.

And this is where the rule becomes confusing.

If the original IRA owner died before their required beginning date and the 10-year rule applies, the IRS says no distribution is necessarily required before year 10; the account simply must be emptied by the deadline.

If the owner died on or after the required beginning date, annual beneficiary RMD rules can apply while the account is also subject to the 10-year depletion requirement.

That's why simply telling someone, "You have ten years," isn't enough.

The Tax Trap

Imagine inheriting a $500,000 traditional IRA.

You decide:

"I'll leave it alone for nine years."

Meanwhile:

The account potentially grows.

You're still working.

Your income increases.

Then the ten-year deadline approaches.

Suddenly, you may be forced to recognize a very large amount of taxable income over a short period.

That's why inherited-IRA planning isn't only about complying with the RMD rules.

It's also about tax timing.

Questions Worth Asking

Before taking distributions, consider:

What is my current tax bracket?

Will I retire during the 10-year period?

Will my income decline in certain years?

Are there years when larger distributions may be more tax-efficient?

Could distributions affect Medicare IRMAA later?

How does this inherited account interact with my own retirement accounts?

What happens if tax rates change?

The goal isn't necessarily to minimize taxes this year.

It's to evaluate the entire distribution window.

Don't Assume Your Sibling Should Use Your Strategy

Two children can inherit identical IRAs and reasonably use completely different distribution strategies.

One may be 58 and earning $250,000.

The other may be 64 and retiring next year.

Their tax situations are completely different.

Same inheritance. Different strategy.

The Bottom Line

The inherited IRA 10-year rule isn't simply:

"Take the money sometime in the next ten years."

Depending on the original owner's age and beneficiary classification, annual distributions may also be required.

And because traditional IRA distributions generally create taxable income, when you take the money can matter almost as much as how much you inherit.

Before moving money, coordinate with a qualified tax professional and financial professional who understands inherited-IRA distribution rules.

FAQ

What is the inherited IRA 10-year rule?
Many non-spouse designated beneficiaries must completely distribute an inherited IRA by December 31 of the tenth year following the original owner's death.

Do I have to take an inherited IRA distribution every year?
It depends. Among other factors, the answer can depend on whether the original owner died before or after their required beginning date and the beneficiary's classification.

Can I leave the entire inherited IRA untouched until year 10?
Sometimes, but not always. That's precisely why beneficiaries shouldn't assume the "10-year rule" means they can automatically wait until the tenth year.

Do I pay taxes on inherited IRA withdrawals?
Distributions from inherited traditional IRAs are generally included in taxable income, although individual circumstances and account characteristics matter.

Can I roll an inherited IRA into my own IRA?
Rules differ for surviving spouses and non-spouse beneficiaries. A surviving spouse has options that generally aren't available to other beneficiaries.

What happens if I wait until the tenth year to withdraw everything?
A large final distribution could create substantial taxable income and potentially affect other income-sensitive items. Whether waiting is permitted and advisable depends on the specific inheritance.

Should I withdraw an inherited IRA immediately?
Not automatically. Distribution timing should be evaluated alongside your income, taxes, retirement date, other accounts and the applicable IRS rules.

Ready to Take the Next Step?

Retirement isn't just about numbers. It's about the life you've worked so hard to build.

Whether your dream is traveling more, spending time with your grandchildren, supporting the causes you care about, or simply enjoying the peace of knowing your bills are covered, your financial decisions today can shape the future you envision.

I believe every family deserves honest guidance, thoughtful education, and a retirement strategy built around their unique goals—not a one-size-fits-all recommendation.

Throughout my career, I've had the privilege of helping individuals and families navigate important financial decisions involving retirement income, life insurance, annuities, mortgages, and real estate. One thing I've learned is that every family's story is different, and every retirement plan should be too.

Before we ever talk about products or strategies, I want to understand you.

What does financial freedom mean to you? What are your biggest concerns? What kind of legacy do you hope to leave? Those conversations are the foundation of every recommendation I make because the best plans begin with listening.

My role isn't to tell you what to do. My role is to educate you, simplify complex financial decisions, and help you feel confident in the choices you make for yourself and your family.

Whether you're just beginning to plan for retirement or looking for a second opinion on your current strategy, I'd be honored to be a resource for you.

Why "Roots & Wealth"?

When I chose the name Roots & Wealth, it wasn't just because it sounded good. It reflects what I believe financial planning should be.

Just like a strong tree, lasting financial security begins with strong roots.

Those roots are built through education, thoughtful planning, meaningful conversations, and decisions that align with your values. Wealth isn't only about the size of your portfolio—it's about having choices, creating stability, protecting the people you love, and living with confidence.

Life will bring changing seasons. Markets will rise and fall. Tax laws will change. Unexpected challenges will happen. But when your financial foundation is built on strong roots, you're in a better position to weather those changes and continue growing.

That's the philosophy behind everything I do.

My goal is to help you build a retirement strategy that's deeply rooted in what matters most to you, so you can enjoy today while creating a lasting legacy for tomorrow.

If you're ready to build a retirement strategy with confidence and clarity, I'd love the opportunity to meet you. Schedule your complimentary Retirement Strategy Consultation and let's start growing your Roots & Wealth together.

Educational Disclosure

This article is for educational purposes only and is not financial, tax, or legal advice. Annuity products are insurance contracts. Guarantees are backed by the claims-paying ability of the issuing insurance company. Product availability, rates, surrender schedules, withdrawal provisions, riders, caps, participation rates, spreads, and other terms vary by carrier and state. Withdrawals may be subject to surrender charges, taxes, and, if taken before age 59½, potential IRS penalties. Fixed index annuities are not stock market investments and do not directly participate in any stock or equity index. You should review your personal situation with a qualified professional before making a decision.