Inheriting an IRA? Here's how to coordinate it with your retirement accounts

When you inherit an IRA, the 10-year distribution rule creates both a challenge and an opportunity.

When you inherit an IRA, the 10-year rule typically requires you to empty the account within a decade. But here's what most people miss:

The timing of these withdrawals matters tremendously for your overall tax strategy.

If you're still working and in your peak earning years, taking large inherited IRA distributions could push you into higher tax brackets—potentially costing you thousands in unnecessary taxes.

Consider this strategic approach:

Take minimal distributions from the inherited IRA during high-income years. Then, once you retire and your income drops, accelerate withdrawals from both the inherited IRA and consider Roth conversions from your own accounts.

This coordination can help you:

✅ Avoid bracket creep during working years

✅ Maximize the value of lower tax brackets in early retirement

✅ Reduce future RMDs from your own accounts

✅ Create more tax-free income through strategic Roth conversions

The key is viewing all your retirement accounts—inherited and your own—as one integrated tax planning opportunity.

Don't let the 10-year rule force you into a suboptimal tax situation.