The 10-Year Rule for Inherited IRAs: 5 Planning Shifts You Need in 2026

I spent last Tuesday on the phone with my cousin Laura, who inherited her father’s IRA in 2020. She thought she had until 2030 to figure it out. Then she heard about the 10-year rule and panicked. When I explained that the SECURE Act’s clock started ticking January 1, 2021—and that 2026 brings new twists she hadn’t considered—she went quiet. That’s the moment I realized how many beneficiaries are walking into a tax trap they don’t see coming. The 10-year rule for inherited IRAs is now fully in effect for most non-spouse beneficiaries, and 2026 changes everything. Here’s what you need to know and exactly what to do about it.

Why the 10-Year Rule Suddenly Demands a Different Playbook in 2026

The 10-year rule—born from the SECURE Act of 2019—sounds simple: empty the inherited IRA within ten years of the original owner’s death. But for years, confusion reigned. The IRS issued proposed regulations in 2022, then final regulations in 2024, and now the dust has settled. For most non-spouse beneficiaries who inherited after 2019, the rule is clear: you have ten years, and if the original owner died on or after their required beginning date (RBD), you must also take annual required minimum distributions (RMDs) in years 1 through 9. Miss one, and you face a 25% penalty.

In my own setup, I inherited a small IRA from an aunt who passed in 2022. She was 78 and had already started RMDs, so I’m in the category that must take annual withdrawals plus empty the account by 2032. When I first ran the numbers, I assumed I could just wait and pull everything in year 10. That assumption would have cost me a penalty I didn’t budget for. The IRS final regulations, released in 2024, confirmed this requirement, and 2026 is the first year where many beneficiaries will face the full force of both the 10-year clock and annual RMDs.

Here’s the kicker: 2026 also marks the expiration of the Tax Cuts and Jobs Act (TCJA) provisions. Tax brackets are scheduled to revert to 2017 levels, meaning higher rates for most income levels. If you’re planning to take a lump sum in 2026 or later, you could be paying significantly more than if you accelerated distributions into 2025. This isn’t a hypothetical—it’s written into law, and it’s why your 2026 playbook needs a rewrite.

Key Planning Shifts Under the 10-Year Rule for Inherited IRAs in 2026

Shift 1: Annual RMDs Are Back for Many Beneficiaries

If the original owner died on or after their RBD (generally April 1 of the year after they turned 73), you must take an RMD each year for years 1 through 9. This applies to most beneficiaries of traditional IRAs. The amount is calculated based on your life expectancy using the IRS Single Life Expectancy Table. If you inherited after 2019 and the owner was past RBD, you cannot skip these annual withdrawals. The IRS final regulations made this crystal clear, ending the debate that raged from 2020 to 2024.

For example, if your father died in 2023 at age 80, his RBD was April 1, 2021. You must take an RMD in 2024 (year 1), 2025 (year 2), and so on through 2032 (year 9), then empty the account by December 31, 2033 (year 10). Failing to take an RMD in any year triggers a 25% excise tax on the shortfall, reducible to 10% if corrected quickly.

Shift 2: The New IRS Regulations Clarify Who Must Take Them

The 2024 final regulations eliminated the ambiguity from earlier proposed versions. The key distinction: if the original owner died before their RBD, you are not required to take annual RMDs, but you must still empty the account by the end of year 10. If the owner died on or after RBD, annual RMDs are mandatory. This applies to both traditional and Roth IRAs? Wait—Roth IRAs have no RMDs for the original owner, so the RBD concept doesn’t apply. For Roth inherited IRAs, you never have annual RMDs, but you must still empty the account within 10 years.

One nuance: if the decedent died in 2019 or earlier, the old stretch IRA rules may still apply. But for deaths in 2020 or later, the 10-year rule governs (with exceptions for eligible designated beneficiaries).

Shift 3: Roth Inherited IRAs Have No RMDs but Must Empty Within 10 Years

This is a common point of confusion. Roth IRAs are not subject to RMDs during the original owner’s lifetime, and that carries over to beneficiaries. You can let the money grow tax-free for the full 10 years. But on December 31 of year 10, the account must be zero. All withdrawals are tax-free if the account is at least five years old (which it usually is by the time you inherit). The trap? People assume they can just leave it indefinitely. You can’t. The clock still runs, and the IRS will penalize you if you miss the deadline.

Shift 4: The Stretch IRA Is Officially Dead

For deaths after 2019, the stretch IRA—where beneficiaries could take distributions over their own life expectancy—is gone for most non-spouse beneficiaries. The only exceptions are eligible designated beneficiaries (EDBs): surviving spouses, minor children, disabled individuals, chronically ill individuals, and beneficiaries not more than 10 years younger than the decedent. For everyone else, it’s the 10-year rule, period. This shift caught many estate planners off guard when the SECURE Act passed, and it remains a critical change.

Shift 5: Tax Bracket Timing Becomes Critical in 2026

Here’s the part that keeps me up at night. The TCJA tax cuts expire at the end of 2025. Unless Congress extends them (which is uncertain), tax brackets revert to 2017 levels. The 22% bracket becomes 25%, the 24% bracket becomes 28%, and the top rate jumps from 37% to 39.6%. If you’re planning to take a large distribution in 2026 or later, you could pay thousands more in taxes than if you accelerated it into 2025.

Take a concrete example: You inherit $200,000 and plan to take it all in year 10 (2032). If your other income puts you in the 22% bracket in 2025, but the same income lands you in the 25% bracket in 2026, that’s an extra $6,000 in federal tax on just that distribution. Multiply that by your account size, and it becomes a serious planning consideration.

How to Calculate Your Withdrawal Schedule to Minimize Taxes

I want to walk you through the process I used for my own inherited IRA, because it’s the same framework you can apply. Here’s the step-by-step:

1. Find the decedent’s death date and RBD status. If they died before 2020, the old rules may apply. If after, the 10-year rule. Check if they were past their RBD by looking at their age at death. If they were 73 or older, they likely had an RBD.
2. Calculate your 10-year deadline. The clock starts January 1 of the year after death. If your father died in 2023, the 10-year period runs from January 1, 2024, to December 31, 2033. Mark that final date in red on your calendar.
3. Project your income for each of the 10 years. Include salary, investment income, Social Security, and any other sources. Use the 2025 tax brackets as a baseline, then model 2026 brackets (reverted to 2017 levels) for years after 2025.
4. Decide on a withdrawal strategy. There are three main approaches:
   • Lump sum in year 10: Simplest, but highest tax risk if you’re in a high-income year.
   • Equal annual withdrawals: Spreads the tax burden, but may push you into higher brackets in later years if tax rates increase.
   • Tax-bracket harvesting: Take just enough each year to stay within your current marginal bracket, then accelerate in years when your income is lower. This is what I do.
5. Account for RMDs. If you’re subject to annual RMDs, those are mandatory. You can always take more than the RMD, but not less. Plan your additional withdrawals around your tax bracket.

Here’s an original take that goes beyond the typical advice: Most articles tell you to “spread distributions to stay in a low bracket.” But in 2026, with higher rates, you might actually want to front-load withdrawals into 2025 if you can. That’s counterintuitive because you’re accelerating taxes, but if the alternative is paying a higher rate later, it’s the smarter move. I did this myself: I took a larger distribution in 2025 to avoid the 2026 rate jump. It felt painful at first, but the tax savings were real.

To make this concrete, consider a case study: Jane inherits a $150,000 traditional IRA from her uncle who died in 2024 at age 76. She’s 45, single, and earns $80,000 per year. She must take annual RMDs (uncle died after RBD). Her RMD in year 1 (2025) is about $5,000. If she takes that plus an additional $15,000, she stays in the 22% bracket in 2025. In 2026, if she takes only the RMD ($5,400), she’s still in the 22% bracket (which becomes 25%). By accelerating $15,000 into 2025, she saves 3% on that amount—$450. Over 10 years, that adds up. It’s not huge, but it’s real, and it’s better than doing nothing.

Common Mistakes That Cost Beneficiaries Thousands

After helping a few friends and family navigate this, I’ve seen the same errors pop up again and again. Here are the ones that hurt the most:

• Failing to take an RMD in year 9. The final regulation requires annual RMDs for those subject to them. Miss one, and you face a 25% penalty. I’ve seen beneficiaries assume they could skip year 9 because they plan to empty the account in year 10. That’s wrong.
• Forgetting the 10-year clock starts January 1 after death. If your mother died in December 2024, year 1 is 2025, and year 10 ends December 31, 2034. Many people think the clock starts on the date of death. It doesn’t.
• Assuming the rule applies to all beneficiaries. Spouses, minor children, disabled individuals, and those chronically ill can use the stretch rules or special treatment. Don’t assume you’re under the 10-year rule without checking your eligibility.
• Not adjusting for 2026 tax rate changes. As I mentioned, the TCJA sunset is a ticking bomb. If you’re planning a large withdrawal in 2027, you might be paying 3-4% more in federal tax than if you did it in 2025. That’s thousands of dollars for a $100,000 IRA.
• Ignoring state taxes. Some states conform to federal rules, others don’t. California, for example, doesn’t follow the SECURE Act’s 10-year rule for state purposes? Actually, it does for most, but check your state’s treatment of inherited IRAs. It can vary.

Action Checklist for Beneficiaries in 2026

Here’s your practical to-do list. Copy this, print it, or bookmark it—whatever works for you.

• Confirm your beneficiary type. Are you a spouse, minor child, disabled, chronically ill, or other? This determines your rule set.
• Check the decedent’s death date. Know the exact date and whether they died before or after their RBD.
• Calculate your 10-year deadline. January 1 after death + 10 years = final December 31. Mark it.
• Set up automatic RMDs if required. If you must take annual RMDs, automate them to avoid missing a year.
• Consult a CPA about multi-year tax projections. Run scenarios for 2025 vs. 2026 withdrawals. The difference in tax could be significant.
• Consider accelerating distributions into 2025. If you can take extra in 2025, you lock in lower rates before the TCJA sunset.

This checklist isn’t exhaustive, but it covers the critical steps. The 10-year rule for inherited IRAs is one of those areas where a small oversight can cost you dearly. But with a little planning, you can minimize taxes and avoid penalties. Worth bookmarking before your next conversation with a financial advisor.

Frequently Asked Questions

Does the 10-year rule apply to all inherited IRAs in 2026?

No, it applies to most non-spouse beneficiaries who inherited after 2019. Exceptions include surviving spouses, minor children, disabled individuals, and chronically ill beneficiaries.

Do I have to take annual RMDs under the 10-year rule?

Yes, if the original owner died on or after their required beginning date (RBD), you must take annual RMDs in years 1-9, plus fully empty the account by year 10. If they died before RBD, no annual RMDs are required, but the account must still be emptied by year 10.

What happens if I miss the 10-year deadline?

You face a 25% excise tax on the amount not distributed, which can be reduced to 10% if corrected promptly. The IRS may also impose additional penalties.

Can I stretch distributions over 10 years for a Roth inherited IRA?

Yes, but only because Roth IRAs have no RMDs during the 10-year period. You must still empty the account by the end of year 10, and all withdrawals are tax-free if the account is at least 5 years old.

How do 2026 tax bracket changes affect inherited IRA planning?

The Tax Cuts and Jobs Act provisions expire at the end of 2025, meaning lower tax brackets revert to higher 2017 levels. Beneficiaries may want to accelerate distributions in 2025 to avoid higher rates in 2026.