If you inherited an IRA in the last few years, there’s a good chance you’ve been hearing about the “10-year rule,” but not fully understanding the consequences. That confusion is now becoming expensive. Many heirs are discovering that missing required distributions can trigger a steep 25% penalty on the amount they failed to withdraw.
The rule stems from changes under the SECURE Act, which eliminated the old “stretch IRA” strategy for most non-spouse beneficiaries. Now, instead of spreading withdrawals over decades, heirs must empty the account within 10 years. Here’s what you need to know about these changes.
