Inherited IRA RMD Rules — 10-Year Rule, Eligible Beneficiaries & SECURE Act

What are the RMD rules for an inherited IRA?

Required Minimum Distribution rules for inherited IRAs changed dramatically with SECURE Act 1.0 (effective January 1, 2020). For most non-spouse beneficiaries inheriting an IRA from someone who died in 2020 or later, the 10-year rule applies: the entire inherited IRA must be distributed by December 31 of the 10th anniversary of the original owner's death.

Annual distributions are generally required during the 10-year period if the original owner had already begun RMDs (reached their Required Beginning Date). The amount of each annual distribution is not specified — only the total must be zero by year 10.

Certain beneficiaries — called Eligible Designated Beneficiaries (EDBs) — are exempt from the 10-year rule and may use the life expectancy (stretch) method: surviving spouses, minor children of the account owner (until age of majority), disabled individuals, chronically ill individuals, and individuals within 10 years of age of the deceased.

Key RMD Rules

• 110-year rule: non-eligible beneficiaries must fully distribute inherited IRA within 10 years of the owner's death.
• 2Eligible Designated Beneficiaries (surviving spouse, minor children, disabled, chronically ill, within 10 years of age) may use the life expectancy stretch method.
• 3Surviving spouse has unique options: treat the IRA as their own, roll it over, or use decedent's age or their own age (whichever gives lower RMD).
• 4Annual distributions may be required during the 10-year window if the original owner had passed their Required Beginning Date.
• 5No aggregation with own IRA: inherited IRAs must be maintained separately and cannot be combined with the beneficiary's own IRAs for RMD purposes.

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