After years of uncertainty, the Internal Revenue Service finalized rules on Thursday to make clear that that people who inherit retirement accounts have 10 years to spend down the funds and, in many cases, that there is a minimum amount they must spend each year.
The 10-year rule applies to 401(k)s, IRAs, and other pre-tax contribution plans inherited on or after January 1, 2020. It does not apply to beneficiaries who are eligible designated beneficiaries (EDBs), meaning spouses and minor children, as well as those who are not more than 10 years younger than the deceased, and disabled or chronically ill beneficiaries.
