Quick Read – Non-spouse heirs must empty inherited IRAs within 10 years and take annual RMDs in years one through nine, leaving no room to defer. – Deferring distributions and dumping the full balance in year ten can push the federal tax bill past $400,000, which is roughly…
10,000 more than a spread approach would cost. – Distributing just enough each year to fill the 24% bracket and accelerating withdrawals during low-income retirement years are strategies that keep most of the $850,000 out of the 32% bracket. – A 61-year-old, still working, recently inherited a traditional IRA from his father worth roughly $850,000. He assumed he had a decade to figure out the tax planning
But if he defaults to the “let it grow, deal with it later” instinct, he is on track to write a large check to the IRS. Under the SECURE Act, a non-spouse beneficiary who inherits a traditional IRA must empty the account by the end of the tenth year after the original owner’s death. What trips up many people is the second half of the rule.
Because his father had already started taking required minimum distributions before he died, the IRS finalized guidance in 2025 confirming that annual RMDs are also required in years one through nine. The account cannot simply sit untouched until year 10. This matters because our reader is in peak earnings territory.