Inherited IRA
An IRA you receive as a beneficiary, now generally subject to a 10-year withdrawal rule for most non-spouse heirs.
An inherited IRA is a retirement account passed to a beneficiary after the owner's death. The rules changed significantly under the SECURE Act: most non-spouse beneficiaries must now empty the account within 10 years, rather than stretching withdrawals over their lifetime as was previously allowed.
That 10-year rule can create a tax squeeze, since large inherited balances must come out — and be taxed as income — during what may be the heir's peak earning years. Spouses have more flexibility and can often treat an inherited IRA as their own. Coordinating inheritance timing with the heir's tax situation is a real planning consideration.
This definition is general information to help you understand a term, not financial, tax, or legal advice. Figures that change year to year (limits, thresholds, rates) should be confirmed against current official sources. For guidance on your situation, a licensed fee-only fiduciary is the right next step.