Suze Orman Says 62-Year-Old's IRA Heir Owes No Annual RMDs Under 10-Year Rule

1 articles · Updated · 24/7 Wall St. · May 21

Kim, 68, can withdraw inherited non-spouse traditional IRA assets on her own schedule because the original owner died at 62, before the required beginning date.
That means the SECURE Act’s 10-year rule applies without yearly RMDs: the accounts must be emptied by Dec. 31 of year 10, but years 1 through 9 carry no mandatory distribution.
A $400,000 inherited balance could be drawn evenly at about $40,000 a year, but larger withdrawals in low-income years may cut taxes before Social Security and her own age-73 RMDs begin.
Waiting until year 10 is legal but costly, potentially pushing a lump-sum withdrawal into the 32% or 35% federal bracket and triggering Medicare IRMAA surcharges.
The rule flips if the decedent died after starting RMDs—such as at 75—when years 1 through 9 require annual payouts, while some heirs less than 10 years younger can still stretch distributions over life expectancy.

How can IRA heirs sidestep the hidden Medicare surcharges and a massive year-10 tax bill?

SECURE Act 2.0 changed inheritance rules again. Is your family's estate plan now a ticking tax time bomb?