10/16/2026
Most people who inherit an IRA make the same expensive mistake: they wait.
Here's why that costs money. 👇🏻
If you inherited a Traditional IRA from someone who died after 2019, the "stretch IRA" your parents may have described is largely gone. Most non-spouse beneficiaries must empty the account within 10 years.
The instinct is to leave it alone and take everything in year 10. That's usually the worst option available. A decade of growth pulled out in a single tax year can push you into a bracket you'd never otherwise touch, and there's no undoing it once the distribution is made.
Spreading withdrawals across the full 10 years is often dramatically cheaper. That's especially true if you have a low-income year coming — a gap between jobs, a sabbatical, or the stretch after you stop working but before Social Security begins.
Three things change your options:
→ Who you are. Surviving spouses have the most flexibility by a wide margin. A few other categories also receive better treatment: minor children of the account owner, beneficiaries who are disabled or chronically ill, and anyone not more than 10 years younger than the original owner.
→ Whether the original owner had already started taking required distributions. If they had, you may owe annual withdrawals during the 10 years, not just a zero balance at the end. Missing those carries a penalty, and it's the detail that catches the most people.
→ Whether it's a Roth. Inherited Roth IRAs still follow the 10-year rule, but qualified distributions are generally tax-free. That flips the math on when to take them.
The rules changed in 2019, and the guidance around them kept shifting for years afterward. If you inherited an account recently and nobody has looked at it since, that's worth doing before your next distribution rather than after.
Contact our office at www.Fiducial.com/consultations to dive into any and all IRA inheritance questions.
