Can you still use the stretch IRA strategy?

Yes, but only for certain beneficiaries. Eligible Designated Beneficiaries (EDBs) — including surviving spouses, disabled individuals, chronically ill individuals, and those within 10 years of age of the deceased — can still use the life expectancy (stretch) method. For everyone else who inherits from a death after 2019, the 10-year rule applies.

Does the 10-year rule require distributions every year?

Not necessarily. If the original owner had not started RMDs before death, the beneficiary only needs to ensure the account is empty by year 10 — there are no mandated annual distributions in years 1–9. However, if the owner had already started RMDs, annual distributions are required in years 1–9 using the beneficiary's life expectancy factor.

What happens after a minor child beneficiary reaches the age of majority?

Minor children of the deceased account owner (not grandchildren) are Eligible Designated Beneficiaries — they can use the stretch method while they are minors. Once they reach the age of majority (typically 18 or 21 depending on state law), the 10-year clock starts. They have 10 years from that date to fully distribute the remaining inherited IRA balance.

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SECURE Act Changes to Inherited IRA Rules — Stretch IRA Eliminated

What did the SECURE Act change about inherited IRA distribution rules?

Before SECURE Act 1.0 (effective January 1, 2020), non-spouse IRA beneficiaries could take distributions from inherited IRAs over their own life expectancy — a strategy known as the "stretch IRA." A 35-year-old inheriting an IRA could spread distributions over 47+ years, allowing the account to continue growing tax-deferred for decades.

SECURE Act 1.0 effectively eliminated the stretch IRA for most non-spouse beneficiaries. Under the new rules, beneficiaries (other than Eligible Designated Beneficiaries) must fully distribute an inherited IRA within 10 years of the account owner's death. This applies to IRAs inherited from decedents who died on or after January 1, 2020.

The change primarily affects adult non-spouse beneficiaries — such as adult children — who could previously stretch distributions over 40+ years. The compressed 10-year window forces larger, more frequent distributions at potentially higher tax rates.

Key RMD Rules

1Pre-2020 deaths: designated beneficiaries can still use the life expectancy (stretch) method.
2Post-2019 deaths: 10-year rule applies to most non-spouse beneficiaries.
3Eligible Designated Beneficiaries (EDBs): surviving spouse, minor children, disabled, chronically ill, within 10 years of age — may still use stretch.
4Annual distributions in years 1–9: required if the deceased had passed their Required Beginning Date.
5Year 10: full distribution of remaining balance required by December 31.

Who Is Affected by the SECURE Act Changes?

Affected (10-year rule): adult children, grandchildren, siblings, other non-spouse individuals, trusts that are not "see-through" trusts, charities (charities have their own rules — no RMD required for tax-exempt organizations). NOT affected (can still stretch): surviving spouses, disabled individuals, chronically ill individuals, minor children of the account owner (until majority), individuals not more than 10 years younger than the deceased.

Planning for the 10-Year Rule as a Beneficiary

If you inherit an IRA and are subject to the 10-year rule: (1) Model income across all 10 years — don't just defer to year 10. (2) Take distributions in lower-income years (e.g., years with large deductions, early retirement). (3) For Roth inherited IRAs, distributions are tax-free — the 10-year rule is mandatory, but the tax impact is zero. (4) Consider a ROTH conversion by the IRA owner (if they are still alive) to leave beneficiaries a tax-free inheritance.

Common RMD Mistakes to Avoid

⚠Assuming a pre-2020 inherited IRA is still subject to the stretch rules — the rules changed only for new inheritances after 2019; existing stretch arrangements continue.
⚠Treating all inherited IRAs as subject to the 10-year rule — EDBs still have the stretch option.
⚠Waiting to distribute in year 10 only to face a massive taxable event — spreading distributions over all 10 years is usually more tax-efficient.

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Frequently Asked Questions

Disclaimer: This content is for informational purposes only and does not constitute tax or financial advice. RMD rules are based on IRS Publication 590-B and SECURE 2.0 Act provisions. Always consult a qualified tax professional or financial advisor for guidance specific to your situation. IRS rules may change; verify current requirements at irs.gov.

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