For decades, inheriting an IRA came with a significant tax advantage: you could stretch the distributions over your own lifetime. If you inherited at 45 and had a 40-year life expectancy, you only had to withdraw a small fraction each year. The rest continued growing, tax-deferred. The strategy was called the stretch IRA, and it was one of the most effective wealth-transfer tools in the tax code. The SECURE Act of 2019 eliminated the stretch IRA for most non-spouse beneficiaries. It was replaced with the 10-year rule — a requirement that the inherited account be fully distributed by the end of
The 2024 final regulations established that how the 10-year rule works depends on whether the original account owner had already reached their Required Beginning Date — the date by which they were required to start taking RMDs. For most accounts, that date is April 1 of the year after the owner turns 73. This single factor determines whether beneficiaries must take annual distributions or can defer everything to year 10. Owner's Status at Beneficiary's Year 10 Requirement Death Obligation Died BEFORE Required No annual distributions Full account must be Beginning Date required in years 19 emptied by end of year 10 Died ON OR AFTER Must take annual RMDs Full remaining balance Required Beginning Date in years 19 based on must be emptied in year own life expectancy 10 The 'at least as rapidly' rule — abbreviated ALAR — is what applies to beneficiaries in the second category. If the original owner was already taking RMDs when they died, the beneficiary must continue taking distributions at least as rapidly as the owner was required to — which means annual distributions based on the beneficiary's own life expectancy for years 1 through 9, then full depletion in year 10.
Not everyone lost the stretch IRA. The law created a category called Eligible Designated Beneficiaries, or EDBs, who are exempt from the 10-year rule and can still stretch distributions over their own life expectancy. EDB Category Distribution Option Notes Surviving spouse Assume account as own, Most flexible option or take life expectancy — can roll into own payments IRA Minor child of the Life expectancy Once child turns 21, account owner payments until age 21, the countdown clock then 10-year rule starts begins Disabled individuals Stretch over lifetime Must provide professional documentation — self-certification is not sufficient Chronically ill Stretch over lifetime Requires medical individuals certification by October 31 of year following death Not more than 10 years Stretch over lifetime Applies to siblings, younger than owner partners close in age Source: IRS Final Regulations on RMDs (July 2024), IRS Publication 590-B. Two important details about EDB qualification: First, for disabled or chronically ill beneficiaries, the 2024 final regulations clarified that self-certification is not sufficient. Documentation must come from a healthcare professional or evidence of Social Security Disability/SSI status, provided by October 31 of the year following the owner's death. Second, special needs trusts that qualify as accumulation trusts can still receive the lifetime stretch even if they name a charity as the remainder beneficiary — an important nuance for families with disabled dependents.
The shift from a 30- or 40-year stretch to a 10-year mandatory depletion has real dollar consequences. Consider a 45-year-old who inherits a $300,000 IRA from a parent who died after reaching their Required Beginning Date. Under the old stretch rules, that beneficiary might have withdrawn $8,000$12,000 per year, taxed at ordinary income rates on modest additional income. Under the 10-year rule with annual distributions required, the annual amount is substantially higher — potentially $25,000$40,000 per year, depending on account growth, all counted as ordinary income on top of their existing salary. For a beneficiary in their peak earning years, inheriting a large traditional IRA under the 10-year rule can mean paying 24%, 32%, or even 37% on those distributions — the opposite of what the original account owner likely intended.
If you're an IRA owner with non-spouse beneficiaries — adult children, for example — the 10-year rule changes the calculus of what you leave behind. A large traditional IRA can become a compressed tax event for your heirs during their highest-earning years. Roth conversions during your lifetime reduce the future RMD burden on you, and they also convert taxable legacy assets to tax-free ones. The combination of no RMDs on Roth IRAs during your lifetime and tax-free distributions for heirs (even under the 10-year rule) makes this a coordination point that an estate attorney and a CPA are both equipped to address. **The inherited IRA rules changed in ways most families aren't aware of. An estate attorney or CPA can review whether your beneficiary strategy still makes sense under the 2024 final regulations.**
From 2021 through 2024, the IRS issued penalty waivers covering|Inherited Roth IRAs are also subject to the 10-year rule for most|For heirs in high brackets, inheriting a Roth rather than a
IRS Final Regulations on RMDs (July 2024), IRS Publication