Stretch IRA vs 10-Year Rule

Inherited IRA: Stretch vs 10-Year Rule

Compare the pre-SECURE "stretch" rule (still grandfathered for pre-2020 inheritances) with the post-SECURE 10-year rule for non-spouse beneficiaries.

Inputs

Inherited balance ($)

Year inherited

Beneficiary age when inherited

Expected annual return (%)

Marginal tax rate (%)

Results

Applicable rule

—

Stretch — lifetime after-tax

—

10-year rule — after-tax

—

Stretch advantage

—

SECURE Act (effective 2020) replaced the stretch rule with a 10-year rule for most non-spouse beneficiaries. Eligible designated beneficiaries (spouses, minor children, disabled, chronically ill, or within 10 years of age) still qualify for stretch.