Inherited IRA Rules in 2026: What Beneficiaries Must Know

The SECURE Act (2019) and SECURE 2.0 (2022) dramatically changed inherited IRA rules — eliminating the "stretch IRA" for most non-spouse beneficiaries and introducing the confusing 10-year rule. Getting this wrong costs thousands in unnecessary taxes.

Who is an Eligible Designated Beneficiary (EDB)?

EDBs can still use the old stretch IRA rules (life expectancy distributions). EDBs include:

• Surviving spouse
• Minor children of the original owner (until age 21, then 10-year rule kicks in)
• Disabled or chronically ill individuals
• Beneficiaries within 10 years of the original owner's age

The 10-year rule for most beneficiaries

Non-EDB beneficiaries (adult children, siblings, non-spouse partners, most trusts) must empty the inherited IRA within 10 years of the original owner's death. IRS clarified in 2023: if the original owner had started RMDs, beneficiaries must take annual RMDs during years 1–9 AND empty the account by year 10.

Optimal withdrawal strategies under the 10-year rule

The worst strategy: do nothing for 9 years, then take everything in year 10. This stacks all income in one year at the highest marginal rate.

The optimal strategy: model your income for each of the 10 years and withdraw in amounts that fill up lower tax brackets each year. If you're a 45-year-old earning $85,000 (22% bracket), withdrawing $15,000–$20,000/year from the inherited IRA stays in the 22% bracket. Taking $200,000 in year 10 pushes you to 32%–35%.

Inherited Roth IRA rules

Same 10-year rule applies to inherited Roth IRAs — but withdrawals are tax-free. Strategy: let the Roth grow tax-free for all 10 years and take the full amount in year 10. Unlike traditional IRAs, there's no incentive to spread withdrawals since there's no tax hit.