When the SECURE Act was passed in December 2019, it brought sweeping changes to the post-death tax treatment of qualified retirement accounts. On July 18, the IRS confirmed that most nonspouse beneficiaries have 10 years to deplete inherited retirement accounts and must take yearly required minimum distributions, or RMDs. The rule applies to accounts inherited since 2020 if the original account owner had already started RMDs. However, you could save on taxes by taking bigger withdrawals sooner, depending on your situation.
Ed Jastrem, Chief Planning Officer at Heritage Financial, discussed the IRS ruling with CNBC.