The 10-year rule: what happens to the IRA you leave your kids

What changed

Before the SECURE Act, an heir could stretch withdrawals across their own life expectancy. Small amounts, taxed lightly, for decades. That option is gone for most heirs. Now the account must be empty by the end of year 10. Every traditional-IRA dollar that comes out is income on the heir's tax return.

The timing detail inside the 10 years

Some heirs must also take yearly minimum withdrawals inside the 10 years — not just empty the account by the deadline. Either way, the heir faces the same question: spread the withdrawals, or wait and take more later? Waiting piles the income into fewer years. Piled-up income climbs the brackets faster.

Why it lands in the most expensive years

Most people inherit from their parents in their 50s — often their own peak earning years. Inherited-IRA withdrawals stack on top of a salary, and the layers land at the heir's highest rates.

(Illustration using 2026 single-filer figures. Not advice, and not your family's numbers.) A single filer with $105,700 of taxable income sits at the very top of the 22% bracket. Every inherited-IRA dollar they take that year lands in the 24% bracket, which runs to $201,775. Larger withdrawals keep climbing from there. The same dollars can face a very different total bill when a retired parent takes them in a lower bracket, or when they are spread across the 10 years. Same money, different calendars, different outcomes.

The Roth difference

An inherited Roth IRA runs on the same 10-year clock. The difference is the tax. Picture the contrast. One set of heirs drains a traditional IRA at their peak rates. Another empties a Roth with the tax already settled. That gap is a big part of why parents with large tax-deferred balances look at conversions while they are alive: Roth conversions in plain English.

What families actually do about it

Sometimes nothing — and that can be right. If the balance is modest or the heirs are in low brackets, the 10-year rule may cost little. Other families spread lifetime withdrawals, or convert in stages during the owner's lower-income years, so less lands on the kids' returns later. Which answer fits is a numbers question for your CPA — and an estate attorney where one is needed. The mistake is not picking the "wrong" option. The mistake is learning the rule only when the inheritance arrives, after the planning window has closed.