What is the 10-year drain rule on inherited IRAs?

Under the SECURE Act (2020), most non-spouse beneficiaries who inherit a Traditional IRA must withdraw the entire balance within 10 years of the original owner's death. The old 'stretch IRA' (decades of slow withdrawals) is gone for most heirs. This compresses the tax hit into a short window, often during the heir's peak earning years.

Do spouses have to follow the 10-year drain rule?

No, surviving spouses can roll the IRA into their own and treat it as their own (own RMD schedule, lifetime stretch). Minor children of the original owner can stretch until age 21, then enter a 10-year window. Disabled or chronically ill beneficiaries are also exempt.

What's the tax cost on an inherited Traditional IRA?

Every dollar withdrawn is taxed at the heir's marginal income tax rate. If your child is a working professional in the 32% bracket, a $1M inherited IRA drained over 10 years can mean $320K+ in federal tax alone, often pushing them into IRMAA cliffs themselves. The calculator models this at the family level.

Should I convert to Roth before death to help my heirs?

Often yes. A Roth conversion done at your retirement bracket (12%, 22%, or 24%) replaces tax at the heir's working bracket (often 24%, 32%, or 35%). The arbitrage is family-level. Calculator runs both scenarios.

Can a Roth IRA still be stretched?

An inherited Roth still has the 10-year drain rule, BUT qualified withdrawals are not taxed (assuming the original owner's 5-year rule was met). So the heir can let it grow untaxed for 10 years and then take it all out in year 10: no tax. This is the single largest case for converting to Roth during your lifetime if leaving money to kids.

Does the 10-year rule require yearly withdrawals?

It depends. If the original owner died AFTER their RMD start age, IRS guidance now requires the heir to also take annual RMDs during years 1 to 9, with the balance fully drained by year 10. If the owner died BEFORE RMD age, the heir can defer all withdrawals to year 10 (concentrating the tax hit). Plan accordingly.

Inherited IRA RMD Calculator: The 10-Year Rule

Step 1

You (the parent) today

Your situation drives Phase 1 of the simulation: your remaining years, your tax bracket, and how much room you have to convert at your rate vs your kids' rate later.

Filing Status

Your Age

Spouse's Age Used only if filing MFJ. Each spouse has their own RMD start age.

Plan-to Age (final death, when kids inherit) The age at which the SECOND spouse dies. Kids inherit then.

First Spouse Death Age (0 = same time) If MFJ: age of the YOUNGER spouse when the first spouse dies. Survivor files Single after this (widow's penalty). 0 = both die simultaneously at plan-to age.

State

YOUR Traditional IRA / 401(k) Balance

SPOUSE'S Traditional IRA / 401(k) Balance Each spouse's IRA is RMD'd separately based on THEIR age & THEIR balance.

Existing Roth Balance (combined)

Taxable Brokerage Balance Non-retirement investment account. Gets a step-up in basis at death, so kids inherit at a cost basis reset to market value, with no tax on the gain before death.

Brokerage Cost Basis What you paid for the holdings. Gains above this are taxed at LTCG when sold.

Other Ordinary Income (pension, wages)

Your Social Security (annual, today) What you're getting now (or what you'd get if you claimed today). Grown at 3%/yr COLA, so no FRA math is needed.

Spouse's Social Security (annual, today)

SS Start Age Defaults to your current age (= "already collecting"). Bump it up if you haven't claimed yet.

Expected Investment Return

General Inflation Applied to tax brackets, std deduction, IRMAA tiers, pensions/wages. SS uses its own fixed 3% COLA.

Step 2

Your kids (the beneficiaries)

Each kid's age and income decide whether they'll pay 22% or 35% on the inherited Traditional IRA. The optimizer uses their bracket to decide if it's cheaper for YOU to pay the tax now vs them pay it later.

Step 3

Your conversion strategy

In the optimized scenario, you convert each year up to a chosen tax ceiling. The simulator compares this against doing nothing.

Conversion Strategy "Smart" converts up to the parent's highest fed bracket where parent's combined fed+state marginal rate stays ≤ heirs' expected combined rate (24% fed + their state). Once on Medicare it also caps income at a 2026 IRMAA tier (see "How this calculator works" in the results).

Custom Conversion / Year

Convert From Age

Convert Through Age Smart strategies often convert AFTER RMDs start too, if room exists.

Pay Conversion Tax From Funding tax from brokerage is the textbook optimization: your converted Roth stays intact, brokerage uses cost basis + small LTCG hit.

Worked example · 2026 federal brackets

What the 10-year rule costs one child

A single child earns $100,000 and inherits a $500,000 traditional IRA. To keep the math plain, assume no growth and no state tax.

Spread evenly, $50,000 a year for 10 years. Taxable income goes from $83,900 to $133,900 (after the $16,100 standard deduction). Tax on each $50,000: $21,800 at 22% is $4,796, plus $28,200 at 24% is $6,768. That is $11,564 a year, or $115,640 in all (about 23%).
All $500,000 in year 10. Taxable income jumps to $583,900, into the 35% bracket. The tax on the IRA is $159,964 (about 32%).
Waiting costs $44,324 more. If the same $500,000 were in a Roth IRA, the tax to the child would be $0.

What to do next

Check the beneficiary form on every IRA and 401(k). The form decides who inherits, not your will.
Run the tool above with your own numbers and each child's income.
Compare your tax rate on a conversion with the rate your kids would pay. Convert only when yours is lower.
Check the Medicare side first. A conversion raises your income and can raise your premiums two years later (IRMAA calculator).
Show the plan to your CPA before you convert. A Roth conversion cannot be undone.

Sources: 10-year rule, annual minimums and life expectancy tables, IRS Publication 590-B; 2026 brackets and standard deduction, IRS Rev. Proc. 2025-32; 2026 IRMAA tiers, CMS. Checked October 10, 2026. Education only, not tax advice.

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Hans Goldstein

Founder & Executive Director · Retirement Literacy Foundation, a 501(c)(3) non-profit

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The Inherited IRA 10-Year Rule
Convert Now, or Let the Kids Pay?