SECURE Act 10-Year Rule
A rule from the SECURE Act of 2019 (for owners who died after 2019) requiring most non-spouse heirs who inherit an IRA or 401(k) to withdraw the entire balance within 10 years of the original owner's death. It largely replaced the old 'stretch IRA,' under which an heir could spread withdrawals across their own life expectancy. If the original owner had already started required minimum distributions, the heir must also take a minimum withdrawal in each of years 1-9 rather than waiting for year 10. Because withdrawals from an inherited Traditional account are taxed as ordinary income, spreading them across the decade usually beats taking a lump sum. Spouses who inherit have more flexible options.
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Related terms
Adjusted Cost Basis · Annuity · APTC · Backdoor Roth · Capital Gains Distribution · Capitalized Interest
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