What is Inherited retirement account 10-year rule?
In short
Most non-spouse beneficiaries who inherit a retirement account from an owner who died after 2019 must withdraw the whole balance by the end of the 10th year after the year of death.
Key takeaways
- Eligible designated beneficiaries, such as a surviving spouse, a minor child of the owner, or a disabled or chronically ill person, can stretch withdrawals over their life.
- If the owner had already started required distributions, the beneficiary must also take annual distributions in years 1 to 9.
- Spreading withdrawals over the 10 years can avoid pushing income into high brackets.
Where it's tested
TCP: Retirement Planning Strategies — study notes, a five-minute revision sheet and practice questions.
Practise: 3 questions
Question 1 of 3 · 0 answered
Under the SECURE Act rules, most non-spouse beneficiaries who inherit an IRA must: