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May 28, 2021

What is the 10-Year Rule for beneficiaries?

Your Guide


10-Year Rule for Beneficiaries

The maximum period over which designated beneficiaries must take distributions from inherited IRAs.


The beneficiary 10-year rule is the maximum period that designated beneficiaries may keep inherited retirement accounts in a beneficiary account. Examples include beneficiary IRAs, beneficiary 401(k)s, beneficiary 403(b) and beneficiary governmental 457(b) plans.

Under the ten-year rule:

  1. the inherited retirement assets must be fully distributed by the end of the 10th year, following the year the participant (owner of an IRA or account under an employer plan) dies. This applies to inherited IRAs including Roth IRAs, inherited 401(k)s, inherited 403(b)s and other inherited retirement accounts.
  2. distributions are optional for years one through nine.

The applicability of the rule depends on when the account was inherited, and who is the beneficiary.

For retirement accounts inherited before 2020

The ten-year rule is not applicable to beneficiaries that inherited retirement accounts before 2020. This is because it was introduced under the Setting Every Community Up for Retirement Enhancement (SECURE) Act of 2019, Pub.L. 116–94, and became effective for retirement accounts inherited after 2019.

 For retirement account inherited after 2019

The 10-year rule applies only to accounts inherited after 2019. And even then, it depends on the type of beneficiary.

  • Designated Beneficiary

For retirement account inherited after 2019, this rule is the only option for a designated beneficiary, regardless of the age at which the retirement account owner died.

  • Eligible Designated Beneficiary

For an eligible designated beneficiary, this rule is an option if the retirement account owner dies before he or she is required to start taking required minimum distributions (RMDs); that is, the retirement account owner dies before the required beginning date (RBD). In that case, the eligible designated beneficiary may choose between the 10-year rule and the life expectancy rule.

Please note: According to Publication 590-B, Distributions from Individual Retirement Arrangements (IRAs) -For use in preparing 2020 Returns (published in March 2021 and updated May 13, 2021), the rule is not an option for an eligible designated, if the retirement account owner died on or after the RBD.  The following is the applicable language:

“The 10-year rule applies if (1) the beneficiary is an eligible designated beneficiary who elects the 10-year rule, if the owner died before reaching his or her required beginning date; or (2) the beneficiary is a designated beneficiary who is not an eligible designated beneficiary, regardless of whether the owner died before reaching his or her required beginning date.” P. 11.

  • Successor Beneficiary

The 10-year rule applies to a successor beneficiary who inherits an IRA or other retirement account from a designated beneficiary (who inherited the account before 2020) or eligible designated beneficiary who was taking distributions over his or her single life expectancy.

Referring Cite

IRC § 401(a)(9)

Additional Helpful Information

  • Annuitized accounts: When the inherited account is an annuitized annuity, the terms of the contract must be consulted to determine the options that are available to the beneficiary.
  • Nondesignated beneficiary: The 10-year rule is not an option for a non-designated beneficiary

Written By

Denise Appleby

Denise is CEO of Appleby Retirement Consulting Inc., a firm that provides IRA resources for financial/ tax/legal professionals. She has over 20 years of experience in the retirement plans field, which includes training and technical consultation.

Denise writes and publishes educational /marketing tools for advisors; available at Denise co-authored several books on IRAs

Denise is a graduate of The John Marshall Law School, where she obtained a Masters of Jurisprudence in Employee Benefits, and has earned 5 professional retirement designations.
She has appeared on numerous media programs, sharing her insights on retirement tax laws.


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