Learn when a ten-year inherited IRA deadline also requires annual RMDs. A defined beneficiary example illustrates the 2025 calculation and tax choices.
March 31, 2025 · Financial Forte Staff
Historical article: prepared retrospectively using information available as of March 31, 2025.
An inherited IRA may come with a deadline ten years away and still require a withdrawal this year. That distinction can be easy to miss, especially if earlier headlines emphasized only the requirement to empty the account by the end of year ten. The owner's age and your beneficiary status help determine whether there are annual obligations along the way.
For 2025, identify the applicable beneficiary rule before setting a withdrawal schedule. Under the final regulations, a beneficiary subject to the ten-year rule can also have annual required minimum distributions when the owner died on or after the required beginning date. A complete plan needs both the annual calculation and the final empty-account deadline.[1]
Establish the facts that determine the rule
Gather the owner's date of death, date of birth, account type and whether the owner had reached the required beginning date. Then confirm the named beneficiary and any relevant status, such as surviving spouse or another eligible designated beneficiary. A trust, estate and individual beneficiary can have different rules.[1]
The eligible-designated-beneficiary category includes specific groups, rather than every person listed on a form. A spouse, certain disabled or chronically ill individuals, an owner's qualifying minor child and someone not more than ten years younger than the owner can have special treatment. Each category has conditions that need verification.
Do not assume an inherited Roth IRA follows every rule of an inherited traditional IRA. The original Roth owner has no lifetime RMD, and the beneficiary analysis differs. Likewise, someone who inherited before 2020 or inherited from another beneficiary needs a review of the rules for that situation.
Confirm whether the deceased owner's final-year RMD was completed, if one was required. That is a separate question from the beneficiary's distributions in later years. An account transfer into the beneficiary's name does not itself establish that all required withdrawals have occurred.
Follow a clearly defined inheritance example
Consider a hypothetical traditional IRA owner who died at age 80 in 2024, after the required beginning date. The sole named beneficiary is an adult daughter, Lena, who turns 50 in 2025. Assume she is not disabled or chronically ill, is more than ten years younger than the owner and otherwise is not an eligible designated beneficiary.
Under these facts, the account is subject to the ten-year rule, with full distribution required by December 31, 2034. Because the owner died after the required beginning date, Lena also has annual beneficiary RMDs beginning in 2025. Waiting until 2034 to take the first withdrawal would not satisfy those annual requirements.[1]
Assume the relevant inherited-account balance on December 31, 2024, is $200,000 and that no adjustment changes the illustration. The Single Life Expectancy Table factor at age 50 is 36.2. Dividing $200,000 by 36.2 gives approximately $5,524.86 for the illustrated 2025 minimum.[2]
Lena would generally complete that first beneficiary RMD by December 31, 2025, rather than using an owner's first-RMD April extension. Have the custodian and tax advisor verify the actual calculation, including account records and the applicable divisor. Later annual calculations generally reduce the initial beneficiary factor under the relevant rules and use the appropriate prior-year balance. They are not simply the same dollar withdrawal repeated until the deadline.
If the owner had instead died before the required beginning date and Lena remained subject to the ten-year rule, the annual-distribution treatment during years one through nine would generally differ. The end-of-year-ten deadline still matters; under the same 2024 death-year assumption it would still be December 31, 2034. That contrast is why the owner's status must be established rather than inferred from the beneficiary's age.[1]
Treat the annual minimum as a floor, not a complete tax strategy
Taking only each year's minimum may leave a substantial balance for the final year. The amount remaining will depend on withdrawals and investment results. A large final-year distribution can concentrate taxable income, so the annual minimum should be considered alongside a broader tax projection.
For illustration, compare Lena taking the approximately $5,525 minimum with voluntarily taking $20,000 during 2025. The larger amount would be roughly $14,475 more before taxes, using rounded figures. Whether that is sensible depends on her current income, future expectations and need for the funds.
If Lena takes $20,000, that satisfies the illustrated 2025 minimum, but the extra withdrawal does not automatically prepay future annual RMDs. Future requirements and the remaining ten-year deadline still need to be tracked. Nor does spreading the account evenly over ten years guarantee the lowest lifetime tax; income and tax rules can change.[1]
If the IRA is entirely pre-tax, distributions generally create taxable income. If inherited basis exists, the tax calculation can differ. Keep the basis records and ask how the withdrawal interacts with other income-sensitive items before choosing an amount beyond the minimum.[2]
Lena may decide to take more in a relatively lower-income year, but that should follow a projection rather than a desire to make every withdrawal identical. Money withdrawn also needs a purpose, whether spending, taxes or reinvestment outside the inherited account.
Do not extend earlier relief into a new year
IRS relief covered certain missed annual beneficiary RMDs in earlier years, including specified 2024 distributions. That relief did not erase the ten-year deadline or provide a general permission to skip 2025. The final regulations apply the relevant distribution provisions beginning in 2025.[1][3]
If an earlier required distribution may have been missed, determine whether relief actually covered it and what action is needed. Avoid assuming every beneficiary or every missed withdrawal received the same treatment.
Keep a record of the final deadline, annual calculation, completed distributions and tax withholding. Confirm the withdrawal early enough to address processing problems. If several inherited accounts exist, ask about the applicable aggregation rules before using one account's distribution to satisfy another's requirement.
Start with the owner, beneficiary and account facts. Then build a schedule that addresses both annual obligations and the final year. Understanding those two layers can help prevent a missed distribution and make the inherited IRA part of a deliberate tax and income plan.
Related reading
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Educational information, not personalized investment, tax, legal or benefits advice. Examples use hypothetical assumptions. Verify current rules and your circumstances before acting.
Sources
- [1] Treasury/IRS T.D. 10001: Required Minimum Distributions — Published July 19, 2024; effective September 17, 2024; relevant RMD provisions apply January 1, 2025
- [2] IRS Publication 590-B: IRA distributions — March 19, 2025 cover
- [3] IRS Notice 2024-35: Certain Required Minimum Distributions for 2024 — April 16, 2024; PDF creation and modification dates verified
