Do You Have to Take Money Out Every Year During the 10-Year Inherited IRA Window?
Many non-spouse beneficiaries learn they have a set number of years to empty an inherited IRA and assume that’s the entire rule. What often surprises people is that, depending on the circumstances, they may also owe a withdrawal every single year along the way, not just by the final deadline.
The short answer
Under the current framework set by the government, many non-spouse beneficiaries must empty an inherited IRA within a set window of years after the original owner’s death. Whether annual withdrawals are also required during that window generally depends on whether the original account owner had already begun taking their own required minimum distributions before they died — if they had, annual withdrawals are typically required each year; if they hadn’t, the beneficiary may be able to wait and take a single lump sum by the final deadline instead.
Why the original owner’s status matters
This distinction exists because the rules were built around continuing whatever distribution pattern the original owner would have followed. If the account owner had already reached the point of taking required withdrawals themselves, the government’s current approach generally continues that yearly pattern for the beneficiary, rather than letting distributions pause entirely and then resume as one large withdrawal. If the owner died before that point, the beneficiary generally has more flexibility about the pacing, as long as the account is emptied by the overall deadline.
What this looks like in practice
- Owner had started withdrawals: annual amounts are generally expected. The beneficiary typically needs to take at least a minimum amount out each year, calculated using life-expectancy-based rules, in addition to eventually emptying the account.
- Owner hadn’t started withdrawals: more flexibility, same final deadline. The beneficiary can generally choose to spread withdrawals evenly, front-load them, or wait and take one lump distribution, as long as the entire balance is gone by the end of the window.
- The final deadline applies either way. Regardless of which situation applies, the account generally still needs to be fully distributed by the end of the overall window that current rules set.
Why waiting until the last year is usually a mistake
Even in situations where annual withdrawals aren’t strictly required, waiting until the final year to take everything out at once can create a large, concentrated tax bill, since the entire balance becomes taxable income in a single year. Spreading withdrawals across the available window, even when it’s optional, is one way beneficiaries try to manage the tax impact rather than facing one oversized distribution at the end.
Why these rules are worth double-checking
Because this framework has changed more than once as the government has revised the underlying law, and because guidance around exactly which beneficiaries owe annual amounts has been clarified and adjusted over time, beneficiaries shouldn’t assume the rules that applied to a friend’s or relative’s inheritance a few years ago still apply today. Confirming current requirements with a tax professional, ideally soon after inheriting, helps avoid an unpleasant surprise about a missed annual amount.
What to weigh
Whether an inherited IRA requires yearly withdrawals during its distribution window, or simply a deadline to empty it by, comes down largely to where the original owner stood in their own withdrawal requirements at the time of death. Because the underlying rules are set by the government and have shifted before, beneficiaries are best served confirming their specific situation rather than assuming one approach applies universally.