Inherited IRA 10-Year Rule: Why Most of the Money Can Land in Year 10

The 10-year rule for inherited IRAs sets a deadline: the account has to be empty by December 31 of the tenth year after the owner died. It does not say how to get there, and the yearly amounts that some beneficiaries must take along the way turn out to be small. The result can be a large balance still sitting in the account going into year 10, all of it taxable in a single year. This guide works one example through the IRS rules and the 2026 federal tax brackets to show how large that effect can be. The figures come from the same engines as the Inherited IRA RMD Calculator.

What the rules require, and what they leave open

For most individuals who inherit an IRA (anyone who is not the owner's spouse, minor child, disabled or chronically ill, or within 10 years of the owner's age), the entire account must be distributed by the end of the calendar year that includes the tenth anniversary of the owner's death (26 U.S.C. § 401(a)(9)(H); 26 CFR § 1.401(a)(9)-3(c)(3)). Whether anything is required before then depends on when the owner died:

• Owner died before their required beginning date (and every Roth IRA counts as this): no distribution is required for any year before the tenth (IRS Publication 590-B).
• Owner died on or after their required beginning date: a required amount is due in each of the earlier years too, and whatever is left comes out by the end of year 10. Each year's amount is the previous December 31 balance divided by the longer of the beneficiary's and the owner's remaining life expectancy from the IRS Single Life Table (26 CFR § 1.401(a)(9)-5(d)(1)).

Those are minimums and a deadline. Taking more than the required amount in a year is allowed; the extra just earns no credit toward a later year's required amount (Publication 590-B, “More than minimum received”).

The required amounts are small

Take the calculator's default case: the owner died in 2025 after their required beginning date, and the beneficiary is an adult who turns 46 in 2026, inheriting $500,000. The divisor is the beneficiary's life expectancy from the table, 40.0 in 2026 and one lower each year, because it is longer than the owner's. That is 2.5% of the balance in year one, rising to only 3.1% by year nine. With the account assumed to grow 5% a year:

The nine required amounts add up to $138,613. The account is still worth about $608,582 at the start of 2035, and everything in it, about $639,011 with that year's growth, is due by the end of the year. That one payment is 82% of everything that comes out of the account over the ten years.

What that does to the tax bill

Federal income tax rates rise with taxable income, and distributions from a traditional IRA are added to your other income in the year you take them. So the same dollars cost more in tax when they arrive together than when they arrive over several years. Three ways of emptying the same account:

In the first pattern, taxable income in year 10 is $712,911, past the $640,600 where the 37% bracket begins for a single filer (Revenue Procedure 2025-32). The same account taken in level payments never leaves the 24% bracket. How much the timing matters depends on your other income, which is what the second table shows (the same two patterns, the same account):

What this comparison does not show

A lower average rate is not the same as more money left after tax. Money left in the account keeps growing without being taxed each year, which is why the three patterns take out different totals ($814,447, $777,624 and $647,523) from the same $500,000. The comparison above measures the tax rate on what comes out; it does not credit that deferral, and it does not follow what you would do with money taken out earlier. That is why it stops at average rates instead of adding up a “total tax” that would favour taking money out early.

• Your other income will not stay at one level for ten years. If it is going to fall (a planned retirement, say), a later year can be taxed more lightly than the example assumes; if it is going to rise, the reverse.
• The brackets and the standard deduction are held at their 2026 values; in practice they are adjusted each year, and the law can change.
• State income tax, credits, and every other rule that depends on your income are outside the model.
• A return of 5% a year every year is an assumption, not a forecast. The calculator lets you change it.
• For an inherited Roth IRA the same 10-year deadline applies, but this page's tax comparison is about traditional IRAs: it does not model how a Roth IRA distribution is taxed.

What the rules do and do not tell you

The rules fix the minimums and the deadline; they do not favour any particular pattern in between. Whether to take more than the minimum earlier, and how much, depends on your other income now and later, your other savings, and your plans, none of which this guide can know. To see the required amounts for your own inheritance, put your details into the Inherited IRA RMD Calculator; to see what a given distribution would cost on top of your own income, your tax return or a tax professional is the right tool. This guide describes how the rules and the tax brackets interact. It is not a recommendation.