US FederalHow does the SECURE Act affect inherited retirement accounts?
The SECURE Act eliminated the 'stretch IRA' for most non-spouse beneficiaries, requiring them to withdraw all funds from an inherited retirement account within 10 years of the original owner’s death.
What the Law Says
The SECURE Act (Setting Every Community Up for Retirement Enhancement Act of 2019) amended the Internal Revenue Code to significantly change distribution rules for inherited retirement accounts. While it did not directly amend § 401 itself, it added new requirements under § 401(a)(9) and related provisions governing required minimum distributions (RMDs) from qualified plans—including 401(k)s—and IRAs.
Before the SECURE Act, many non-spouse beneficiaries could stretch distributions from inherited retirement accounts over their life expectancy—potentially decades—deferring taxes. The SECURE Act repealed that option for most beneficiaries.
Now, with limited exceptions, beneficiaries who inherit a retirement account (including those held in plans governed by 26 U.S.C. § 401) after December 31, 2019, must withdraw the entire account balance by the end of the 10th calendar year following the year of the original owner’s death.
The law preserves special treatment for ‘eligible designated beneficiaries’—including surviving spouses, minor children (until age 21), disabled or chronically ill individuals, and beneficiaries not more than 10 years younger than the deceased owner—who may still use life-expectancy payouts.
Statutory TextA trust shall not be treated as a qualified trust under this section unless it meets the requirements of subsection (a)(9).
— 26 U.S.C. § 401 — Qualified pension, profit-sharing, and stock bonus plans
What to Do
Determine if you’re an ‘eligible designated beneficiary’ (e.g., spouse, minor child, disabled person) — if yes, life-expectancy payouts may still apply.
If not eligible, plan to fully distribute the inherited account by December 31 of the 10th year after the owner’s death.
Consult a tax professional before taking distributions — timing affects tax liability and potential penalties.
Review beneficiary designations on all retirement accounts to align with current SECURE Act rules.
Consider converting inherited IRAs to Roth IRAs only if permitted (note: non-spouse beneficiaries generally cannot convert).
Sources
Not legal advice. This article is general information based on publicly available sources, written for educational purposes. Laws change and individual situations vary. Consult a licensed attorney in your jurisdiction before acting on anything you read here. Last reviewed: 2026-06-08.