The long-standing strategy of stretching an inherited IRA across a lifetime is gone for most heirs. Under rules that took hold after the SECURE Act, a non-spouse who inherits a traditional IRA from an owner who died in 2020 or later generally has just 10 years to drain the account, and every dollar of a traditional-IRA withdrawal lands as ordinary income. Compressing decades of deferred taxes into a single decade — often during an heir’s peak earning years — can push a beneficiary into higher brackets and produce a bill far larger than families expect.
The end of the stretch IRA
For years, a beneficiary could name a young heir and spread required withdrawals from an inherited account over that heir’s own life expectancy. A grandchild in their twenties might take tiny distributions for 50 or 60 years, letting the balance compound with only a modest annual tax drag. That approach, known as the stretch, turned an inherited IRA into a multi-decade tax shelter and a genuine engine of family wealth.
Congress closed the door for most heirs. The Internal Revenue Service guidance for IRA beneficiaries now imposes a 10-year deadline: the entire account must be emptied by the end of the tenth year after the original owner’s death. The clock applies to adult children, grandchildren, siblings, friends, and most other non-spouse beneficiaries who inherited after 2019, regardless of how young they are or how much the account holds.
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Why the tax bill can turn steep
The damage comes from timing as much as size. A traditional IRA holds money that was never taxed going in, so withdrawals are taxed as ordinary income at the same rates as a paycheck. When an heir must remove a large balance inside 10 years, those withdrawals stack on top of existing wages, and a mid-career professional who inherits a substantial account can watch a chunk of it disappear into the top brackets.
A wrinkle in the final rules makes the planning harder. According to IRS Publication 590-B, when the original owner had already reached the age for required minimum distributions before dying, many beneficiaries must take a withdrawal in each of years one through nine and still empty the account by year 10. That removes the option of letting the balance sit untouched and taking one large distribution at the end, which had been a common assumption after the law first passed.
The practical fix is spreading withdrawals evenly rather than bunching them. Pulling a roughly equal slice each year keeps more of the money in lower brackets than a single year-10 lump sum would, and it smooths the effect on income-tested items such as Medicare premium surcharges. Heirs who inherit late in a high-earning stretch sometimes wait for a lower-income year, such as after retirement, to take the larger portions, provided the 10-year window allows it.
Which heirs still escape the deadline
A narrow group remains exempt from the 10-year squeeze. The rules carve out what the agency calls eligible designated beneficiaries: a surviving spouse, a minor child of the owner, a disabled or chronically ill person, and anyone not more than 10 years younger than the deceased. These heirs may still stretch distributions over their own life expectancy, though a minor child’s exemption converts to the 10-year rule once that child reaches adulthood.
Spouses have the widest set of choices. A surviving spouse can roll an inherited IRA into their own account, delaying withdrawals until reaching their own required beginning age and naming new beneficiaries, an option no other heir enjoys. That flexibility is one reason many married couples name each other as primary beneficiary and leave children as contingent heirs, accepting that the 10-year clock will eventually apply when the second spouse dies.
Roth accounts change the calculation. An inherited Roth IRA is still subject to the 10-year emptying rule for most non-spouse heirs, but qualified withdrawals come out tax-free, so the deadline becomes a question of lost future growth rather than a tax event. The agency’s distribution guidance treats the two account types alike on timing and differently on taxation, which is why some owners weigh converting to a Roth during their lifetime specifically to spare heirs the ordinary-income hit.
What the new regime rewards is coordination before death, not scrambling after it. An owner who understands that a favored heir will face a compressed, fully taxable payout can act while alive — converting to a Roth in stages, splitting the account among several beneficiaries, or steering some assets toward charity. The families caught off guard are the ones who assumed the stretch still existed, and for them the open question is no longer how long the money can last but how much of it survives the decade.
This article was researched and drafted with the assistance of AI and reviewed by The Money Overview editorial team.
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