Do You Need Annual RMDs on an Inherited IRA?

Somebody died. Somebody you loved.

A few weeks later, while you are still finding their handwriting on old grocery lists, a letter arrives from a brokerage firm. It reads like it was written by a committee of lawyers being paid by the syllable.

Congratulations. You have inherited an IRA.

You now own an account with your name on it, funded with money you did not earn, governed by rules you did not write, enforced by an agency that does not accept “nobody told me” as a defense.

There is also a clock running on it. You just cannot tell yet how fast.

So almost everyone asks the same question first: do I have to take money out of this thing every year?

And the answer is the least satisfying word in the English language.

Sometimes.

Not yes. Not no. Sometimes. The gap between the yeses and the nos is worth tens of thousands of dollars, and which side you land on has almost nothing to do with you. It depends on a fact about the person who died.

Here is how to find out which one you are.

Before 2020, inherited IRAs were a beautiful thing. A 35-year-old who inherited an IRA from a parent could stretch distributions over their own life expectancy. Small slice each year, the rest compounding tax-deferred for decades. Planners called it the Stretch IRA. Estate attorneys built practices around it.

Congress noticed. A multigenerational tax shelter is, from the Treasury’s angle, a multigenerational revenue leak.

The SECURE Act of 2019 closed it. For most people inheriting from someone who died after 2019, the stretch is gone, replaced by the 10-year rule: empty the account within ten years.

Except it was not that simple, because the statute was ambiguous about one critical detail, and for four years nobody (not beneficiaries, not custodians, not CPAs) knew for certain whether the 10-year rule also required annual withdrawals along the way. The IRS issued proposed rules, then transitional relief in Notice 2024-35 and the notices before it, then final regulations applying beginning in 2025.

This matters to you for one practical reason: most of the inherited-IRA advice online was written during the confusing years. A 2021 article confidently telling you “no annual RMDs under the 10-year rule” is not lying. It is describing a world that no longer exists in full.

If you have been Googling this and getting contradictory answers from equally credible sources, you are not losing your mind.

Inherited IRAs fall into roughly three buckets:

Bucket three is the ambush. The phrase “10-year rule” sounds like a decade-long vacation from paperwork. For a large number of beneficiaries it is not. It is annual homework with a hard deadline stapled to the end.

Which bucket you land in comes down to five facts: when the owner died, whether they had reached their required beginning date, who you are to them, whether the account is traditional or Roth, and whether the beneficiary is a person at all. The IRS lays out the categories in its guidance on required minimum distributions for IRA beneficiaries.

An inherited IRA is an IRA you receive after the original owner dies. You are the beneficiary. It can trace back to a traditional IRA, a Roth, a SEP, a SIMPLE, or a workplace plan moved into an inherited IRA.

The single most important fork in the road: are you the spouse, or not?

A surviving spouse gets options nobody else gets, including treating the inherited IRA as their own, effectively erasing its inherited status. A non-spouse beneficiary cannot. Per IRS Publication 590-B, if you inherit a traditional IRA from someone other than your spouse, you cannot treat it as your own and you cannot make contributions to it.

It is not your retirement account. It is a retirement account you are the custodian-in-waiting of, with a countdown clock attached.

Every traditional IRA owner eventually reaches a required beginning date, the point where the IRS stops allowing deferral. Under current rules that is generally tied to the year the owner turns 73, with the first withdrawal allowed to slide to April 1 of the following year. The mechanics live in the IRS overview of retirement topics: required minimum distributions.

For inherited-IRA purposes the question is not “how old were they?” It is:

The IRS logic, translated into human: if the owner had already started draining the account on schedule, the beneficiary keeps draining it on schedule. If the owner had not started, the beneficiary does not have to either; they just have a deadline.

That is the whole intuition. The rest is arithmetic.

Your mother dies in 2026 at age 69. She never took an RMD because she never had to. You inherit her $500,000 traditional IRA. You are an adult child, not disabled or chronically ill, more than ten years younger than she was. A plain-vanilla designated beneficiary.

You are in the 10-year rule. And in this version: no distribution is required in years one through nine.

Your only hard obligation is that the account reaches zero by December 31, 2036: the tenth calendar year following the year of death.

In between, you can take nothing for nine years and cash out at the end, take equal slices, take big chunks in low-income years, or empty it next Tuesday. All legal. The IRS only cares about the balance on the deadline.

Same account. Same $500,000. Same you.

But this time your father dies at 82. He had been taking RMDs for years, an autumn ritual alongside leaf-raking and complaining about the Jets.

Now you are subject to the 10-year rule and to annual distributions during that window. The final regulations and Publication 590-B are clear: when the owner dies after the required beginning date, a non-eligible designated beneficiary keeps taking annual distributions, and the account must still be completely emptied by the end of year ten.

Two identical accounts. Two identical beneficiaries. Wildly different obligations, based entirely on how old the decedent happened to be.

If you remember one thing from this article, make it this:

Here is a trapdoor that catches families in the worst possible month.

Your father was 80, dutifully taking RMDs, and his 2026 required amount was $25,000. He withdrew $10,000 in the spring and died in September.

That remaining $15,000 still has to come out for 2026. The IRS treats the year-of-death RMD as the amount the owner would have been required to withdraw but had not yet taken. It does not evaporate because he did.

It is separate from whatever your schedule looks like starting the following year. And it is exactly the kind of thing a grieving family will not think to check, which is why one of your first questions to the custodian should be whether the deceased satisfied their RMD for the year of death.

The SECURE Act did not torch the stretch for everyone. It carved out a protected class called eligible designated beneficiaries. Per IRS beneficiary guidance, that generally includes:

If you are in this club, you may be able to take distributions over your own life expectancy instead of cramming everything into a decade.

Inherit a traditional IRA from your spouse and you generally get three options: treat it as your own, roll it into your own IRA or a qualified plan, or stay a beneficiary.

Most people’s instinct is to consolidate. Fewer accounts, cleaner statements. Often that is right.

But there is a scenario where “cleaner” is very expensive, and it involves age 59½.

Distributions from an inherited IRA are generally not hit with the 10% additional tax on early distributions just because the beneficiary is under 59½. Being the beneficiary of a deceased owner is an explicit exception on the IRS list of exceptions to tax on early distributions.

The moment a surviving spouse elects to treat the account as their own, that shield can vanish.

Run it on a real person. A 52-year-old widow inherits $700,000 and needs about $50,000 a year for the next seven-plus years.

Seven years of $50,000 is $350,000. Ten percent of that is $35,000, handed over for the privilege of a tidier account list.

The right move flips depending on the survivor’s age, income needs, and the late spouse’s age. It is one of the highest-stakes “small” administrative decisions in personal finance, and it is usually made by someone in the worst six months of their life, on a form, in a hurry. We covered the broader tax squeeze survivors face in The Widow’s Penalty. This decision sits right on top of it.

A child of the deceased who has not reached the age of majority is an eligible designated beneficiary and can generally take life-expectancy distributions while that status holds.

But not forever. Once the minor reaches the applicable age of majority, the remaining balance flips into a 10-year distribution period.

Note the wording: a child of the deceased. A grandchild, a niece, a nephew, generally not covered by this carve-out.

Both categories qualify and can potentially use life-expectancy distributions instead of the flat 10-year rule.

One warning: “disabled” and “chronically ill” are terms of art. They carry specific definitions under federal tax rules. Everyday usage, “my brother’s back is shot”, is not the test. The documentation requirements are real.

An individual not more than ten years younger than the deceased owner is an eligible designated beneficiary.

This is the sleeper. It is the sibling case, the unmarried-partner case, the close-friend case. A 78-year-old owner leaves the account to a 72-year-old sibling. Six years younger. That beneficiary may have options that look nothing like the ten-year sprint imposed on a 40-year-old nephew.

People leave money on the table here constantly, mostly because they never knew the category existed.

Roth IRA owners generally have no lifetime RMDs. They never have to take a dollar out while alive.

But beneficiaries of Roth IRAs are subject to inherited-account rules. The Roth does not escape the beneficiary regime; it enters from a favorable angle.

Here is the mechanic: when a Roth IRA owner dies, the minimum-distribution rules are generally applied as though the owner died before their required beginning date. Always. Regardless of age.

Follow that through and you land somewhere pleasant. For a typical adult designated beneficiary under the 10-year rule: no annual RMDs in years one through nine, and the account fully distributed by the end of year ten.

On top of that, withdrawals of contributions from an inherited Roth are tax-free, and most distributions from an inherited Roth are tax-free, though earnings can be taxable if the five-tax-year requirement has not been met.

So the inherited Roth is the rare case where letting it ride and taking it late is often defensible: ten more years of tax-free compounding, then a tax-free payout.

Here is where the flexibility of the “no annual RMDs” bucket becomes a loaded weapon.

You inherit an $800,000 traditional IRA. No annual RMDs required. You are busy, the market is fine, and every year “next year” seems like a better time to deal with it.

Nine years pass. The balance is $950,000. And all $950,000 has to come out in year ten.

That is not a withdrawal. That is a taxable-income event with its own weather system. Depending on your other income and filing status, a distribution like that can push you into the top brackets, change how much of your Social Security benefits are taxable, trigger income-related adjustments to your Medicare premiums, reshuffle your capital-gains treatment, and wipe out credits you were counting on, all in one calendar year. The IRMAA version of that cliff is exactly the one we mapped in Roth Conversions and IRMAA, and it works the same way here.

Meanwhile, the person who took roughly $80,000 to $100,000 a year for ten years paid tax at far lower marginal rates and never had a single dramatic tax return.

Same account. Same law. Same total dollars. Radically different amount handed to the government.

“Not required to withdraw” is not the same as “smart to wait.” The law gives you a window. It does not give you advice.

Your withdrawal schedule does not have to be flat, and it does not have to be independent of your life.

An adult child inherits $700,000:

The same $70,000 costs wildly different amounts in those three years. The 10-year rule, used deliberately, is a tax-arbitrage window: ten shots at filling up low brackets in your cheapest years. The sequencing logic is the same one behind the withdrawal order that quietly costs retirees six figures.

Even beneficiaries who are stuck with annual RMDs get some of this. The RMD is a floor, not a ceiling. Taking more in a good year drains the balance and shrinks the year-ten cliff.

How is the annual RMD calculated? For life-expectancy distributions, you use a beneficiary-specific factor from the applicable IRS table and divide the relevant account balance by it. The correct table depends on your status and the owner’s circumstances; the tables and worked examples are in Publication 590-B. Your custodian may compute it, but the legal responsibility is yours.

Can you take more than the RMD? Always. It is a minimum. But extra in one year generally does not excuse the next year’s requirement.

Can you put money back? Generally no. Inherit from someone other than your spouse and you cannot contribute, and you cannot roll money in or out the way you can with your own IRA. Once it is out, it is out.

Do multiple inherited IRAs aggregate? Be careful. Ordinary IRA RMDs can sometimes be satisfied from another IRA of the same owner, but inherited accounts carry specific restrictions, spelled out in the IRS RMD FAQs. Do not assume one withdrawal covers another account. Ask the custodian, per account, in writing.

Is the window measured from the date of death? No. It runs on calendar years. Owner dies in 2025, deadline is December 31, 2035. Someone who inherits on December 31 gets a meaningfully shorter practical runway than someone whose relative died on January 2 of the same year.

What about inherited 401(k)s? The same broad beneficiary concepts generally apply to defined-contribution plans, though the plan document can limit your options. Your rights under the plan are outlined by the Department of Labor’s retirement plan guidance. Inherited plan assets can often move into an inherited IRA by direct rollover, after which the inherited-account rules follow.

What if the owner died in 2019 or earlier? Different world, different rules. Do not apply anything here to an old inherited account without first checking the date of death.

Estates and trusts are their own country with their own language. The SECURE Act’s categories are built around individuals; a non-individual beneficiary generally follows different rules, broadly based on the pre-SECURE framework. Trusts can sometimes qualify as “see-through” trusts, but only if very specific requirements are satisfied.

The practical warning: a trust name on a beneficiary form tells you almost nothing. Two trusts with nearly identical documents can produce completely different outcomes. That is a hire-the-specialist situation, not a read-a-blog-post situation. This one included.

The favorable treatment does not cascade down the generations.

A parent leaves an IRA to a disabled adult child who takes life-expectancy distributions. Years later that child dies with a balance remaining. The successor beneficiary generally gets a 10-year rule: the remaining interest must generally be distributed within ten years of the eligible beneficiary’s death.

The stretch, where it survives at all, survives for one generation. Then the clock starts.

Missing a required distribution triggers an excise tax, generally 25% of the shortfall, reduced to 10% if corrected within the applicable two-year window. It is reported on Form 5329, which is also where you request a waiver.

Two pieces of reassurance:

The only genuinely bad strategy is pretending it did not happen.

Deliberately simplified. Date of death, account type, plan terms and beneficiary status can all move the answer.

Jane, 45. Mother dies in 2026 at 68. $400,000 traditional IRA, no eligible-beneficiary exception, owner died before her RBD. Jane is in the 10-year rule with no annual RMDs. Deadline: December 31, 2036. Real flexibility to time withdrawals around her income.

Same Jane. Mother dies at 80 instead. Identical $400,000. Owner died after her RBD, so Jane faces annual RMDs plus the 2036 deadline. She cannot sit on her hands. One fact changed (the decedent’s age) and the entire cash-flow profile changed with it.

Mark, 55. Wife dies, leaves him $600,000. If he needs income before 59½, staying a beneficiary preserves the exception to the 10% early-distribution tax. Treating it as his own may expose pre-59½ withdrawals to that tax. The simpler option is the costlier one.

Sarah, 42. Father dies in 2026, leaves a $300,000 Roth IRA. Because inherited Roths are treated as if the owner died before the RBD, Sarah has no annual RMDs in years 1–9 and must empty it by December 31, 2036. Because qualified Roth distributions come out tax-free, letting it compound is, unusually, a reasonable plan.

And one nobody puts on these lists: decide how the money should be invested. A ten-year horizon is not a thirty-year one. Dumping everything into cash costs you a decade of growth. Pretending you have unlimited runway when you will withdraw half in year four creates risk you did not sign up for. Distribution schedule and investment allocation are one decision, not two.

No, not every inherited IRA requires an annual RMD. And no, you should not assume you can coast for nine years and cash out at the end.

Eligible designated beneficiaries (spouses, minor children, disabled and chronically ill individuals, and people within ten years of the decedent’s age) play by different, generally friendlier rules. Inherited Roth IRAs carry deadlines even though Roth owners never had lifetime RMDs, but they are treated as if the owner died before the RBD, which usually means no annual RMDs and a tax-free exit.

And the detail that saves real money: an inherited IRA distribution generally is not subject to the 10% early-distribution tax just because you are under 59½. That is not the same as tax-free. Taxable distributions from an inherited traditional IRA are still ordinary income, and they still stack on top of your salary.

Which is why the question you opened with (how much do I have to take out?) is the wrong one to end with.

The better question: what does the law require me to withdraw, how much flexibility do I actually have, and how should I spend that flexibility across the years left on the clock?

Answer it well and you turn a confusing, grief-adjacent piece of paperwork into the most tax-efficient inheritance your family will ever receive. Answer it badly and the IRS will answer it for you in year ten.

General information, not tax or legal advice. Inherited-IRA rules turn on specific facts, and the cost of getting them wrong is high enough to justify a professional review of your particular account.