Retirement accounts are among the most significant financial assets many Americans hold at death. At the end of 2025, IRAs alone held $19.2 trillion, while defined contribution plans—including 401(k), 403(b), 457, and similar plans—held another $14.2 trillion. Among families that own individual-account retirement assets, those accounts represented 65% of their financial assets, according to EBRI’s analysis of the Federal Reserve’s 2022 Survey of Consumer Finances. That’s why it’s important to get the planning right.

Planning for inherited retirement accounts used to be different. In many cases, beneficiaries could stretch distributions over their own life expectancy, which allowed for tax deferral and spread the income tax bill over years, or even decades, when IRAs were left to grandkids.

That changed significantly with the SECURE Act and the SECURE 2.0 Act. The SECURE Act was signed into law by President Donald Trump during his first term, with many of the changes taking effect beginning in 2020. It was followed by the SECURE 2.0 Act, signed into law by President Joe Biden, with some provisions effective immediately and others taking effect in later years.

Effectively, the stretch IRA no longer exists as an option for most non-spousal heirs of someone dying today. Instead, in most cases they must drain the account within 10 years.

Today, the treatment of an inherited retirement account depends on several issues, including when the account owner died, what type of account is involved, who the beneficiary is, whether the owner had already reached the required beginning date, and whether the beneficiary qualifies for a statutory exception. Adult children, surviving spouses, trusts, charities, minor children, and disabled or chronically ill beneficiaries can all face different outcomes. Here’s what you need to know.

The First Question: Date-of-Death

The most important question for beneficiaries is: When did the account owner die? Most of the major inherited-account changes apply when the original account owner died in 2020 or later. For many beneficiaries, that replaced the old “stretch” regime with a 10-year payout rule. For deaths before 2020, beneficiaries may still be under pre-SECURE Act rules.

The Follow-up Questions

To sort through the inherited-account rules, there are two more questions that you need to answer: What kind of account did the account owner have? And what was the relationship between the beneficiary and the now-deceased account owner?

Here’s why the first follow-up question matters: The rules may differ depending on whether the account is a traditional IRA, a Roth IRA, or a qualified employer maintained plan such as a 401(k), 403(b), 457.

With a traditional IRA, distributions are generally taxable as ordinary income when withdrawn, and inherited traditional IRAs are subject to post-death required minimum distribution (RMD) rules. With a Roth, the inherited account is still subject to post-death distribution rules, but most qualified Roth distributions are income-tax-free. Despite the fact that lifetime RMD rules differ for Roth owners, inherited Roth IRAs are generally subject to the same 10-year distribution rule as inherited traditional IRAs. SECURE 2.0 eliminated lifetime RMDs........

© Forbes