When you inherit a Fidelity IRA, the rules for how and when you must take distributions depend on your relationship to the original owner, your age, and whether the original owner had already started required minimum distributions (RMDs). Most adult non-spouse beneficiaries face the 10-year rule: the entire account must be emptied by December 31 of the 10th year after the original owner’s death. Fidelity provides online tools and dedicated estate services to help beneficiaries navigate this process.
The 10-Year Rule: The Core Rule for Most Beneficiaries
Under the SECURE Act (effective January 1, 2020), most non-spouse beneficiaries who inherit an IRA must withdraw all funds by December 31 of the 10th year following the year of the owner’s death. There are no required annual distributions during years 1–9 unless the decedent had already started required minimum distributions (RMDs).
If the original owner had NOT yet started RMDs (died before their Required Beginning Date):
- Beneficiary can take distributions in any amount, at any time
- Account must be fully distributed by December 31 of the 10th year after death
- Strategy: spread withdrawals across years to manage tax brackets
If the original owner HAD started RMDs (died on or after their Required Beginning Date):
- Beneficiary must take annual RMDs in years 1–9 based on the beneficiary’s own life expectancy
- Account must be fully emptied by December 31 of the 10th year
- This rule was confirmed by IRS final regulations issued in July 2024
The Required Beginning Date is April 1 following the year the original owner turns age 73 (if born 1951–1959) or age 75 (if born 1960 or later) under SECURE 2.0.
Who Can Still Use the Stretch IRA (Eligible Designated Beneficiaries)
Five categories of beneficiaries — called Eligible Designated Beneficiaries (EDBs) — are exempt from the 10-year rule and may instead take distributions over their own life expectancy:
| Eligible Designated Beneficiary | Distribution Rule |
|---|---|
| Surviving spouse | Life expectancy or roll to own IRA |
| Minor child of the decedent | Life expectancy until majority, then 10-year rule |
| Disabled individual (IRS definition) | Life expectancy |
| Chronically ill individual | Life expectancy |
| Person not more than 10 years younger than decedent | Life expectancy |
All other beneficiaries — adult children, siblings, nieces, nephews, friends — must use the 10-year rule.
Surviving Spouse: Three Options
A surviving spouse has the most flexibility of any beneficiary:
- Roll to their own IRA — Treat the inherited IRA as their own; their own RMD rules apply; they can also make new contributions if eligible. Best if the surviving spouse is younger than the deceased.
- Open an inherited IRA — Keep the account as an inherited IRA; use the deceased’s or their own life expectancy to calculate RMDs. Useful if the surviving spouse is under 59½ and needs penalty-free access.
- Life expectancy distributions — Take distributions based on the surviving spouse’s single life expectancy each year.
No 10% Early Withdrawal Penalty
One key benefit of an inherited IRA: there is no 10% early withdrawal penalty, regardless of your age. This applies to both inherited traditional IRAs and inherited Roth IRAs. You will still owe ordinary income tax on distributions from an inherited traditional IRA.
Inherited Roth IRA Rules
The 10-year rule applies to inherited Roth IRAs the same as traditional IRAs — the account must be emptied by the end of the 10th year. However:
- Distributions are generally tax-free if the original Roth IRA was held for at least 5 years
- No annual RMDs required during the 10-year period, even if the decedent was past their RBD (because Roth IRAs have no RMDs for the original owner)
- Strategy: let the Roth account grow tax-free for all 10 years, then take a lump sum in year 10
Inherited IRA Rules: What You Cannot Do
- No contributions — You cannot add money to an inherited IRA
- No rollover to your own IRA — Non-spouse beneficiaries cannot roll an inherited IRA into their own IRA (doing so creates a taxable distribution)
- No conversion to Roth — Non-spouse beneficiaries cannot convert an inherited traditional IRA to a Roth (only surviving spouses who roll to their own IRA can do this)
- Do not combine inherited IRAs from different decedents — keep each inherited IRA separate by decedent
How to Open a Fidelity Inherited IRA
- Notify Fidelity — Call Fidelity’s Estate Services team or use the online beneficiary claim form at fidelity.com. Have the original owner’s account number and death certificate ready.
- Establish the inherited IRA account — Fidelity will open a new account titled correctly, for example: “Jane Smith, Deceased June 1, 2026, IRA FBO Michael Smith.” The account is in your name as beneficiary but must reflect the decedent’s name.
- Transfer assets — Assets move in-kind from the decedent’s account to the inherited IRA. You do not need to liquidate investments first.
- Choose investments — Once the inherited IRA is established, you can hold, sell, or rebalance within the account using Fidelity’s full investment lineup.
- Plan your distributions — Work with a tax advisor to decide on a distribution strategy that minimizes tax impact over the 10-year window.
Fidelity has a dedicated Estate Services team and provides a beneficiary RMD calculator to help you estimate required distributions.
Inherited IRA Titling
The IRS requires inherited IRAs to be titled specifically to show the beneficiary relationship. A correctly titled account at Fidelity looks like:
[Decedent Name], Deceased [Date], IRA FBO [Beneficiary Name]
Do not simply retitle the account in your own name — that triggers a taxable distribution of the entire balance.
Distribution Planning Strategies
For non-EDB beneficiaries under the 10-year rule with annual RMD requirements:
If the decedent had NOT started RMDs:
- No mandatory annual withdrawals in years 1–9
- Options: equal annual draws over 10 years; larger draws in low-income years; lump sum in year 10 (most tax-inefficient)
- Use Fidelity’s tax tools to project bracket impact
If the decedent HAD started RMDs:
- Annual RMDs required in years 1–9 (based on your life expectancy per IRS Single Life Table)
- Full balance must be out by year 10
- Strategy: take the RMD each year plus additional voluntary distributions in lower-income years
For inherited Roth IRAs: consider taking $0 in years 1–9 (no tax cost, maximum tax-free growth) and withdrawing the full balance in year 10 tax-free.
Fidelity Tools for Inherited IRA Beneficiaries
- Beneficiary RMD Calculator — Estimates your annual required minimum distributions
- Estate Services team — Dedicated support for beneficiary claims and account transfers
- Tax reporting — Fidelity issues Form 1099-R for all distributions from inherited IRAs
- Planning guides — Available in Fidelity’s Learning Center under estate planning
Related Fidelity Guides
- Fidelity Traditional IRA 2026 — Deduction Rules & Limits
- Fidelity Roth IRA 2026 — Limits, Rules & How to Open
- Fidelity Backdoor Roth IRA 2026 — Step-by-Step Guide
- Fidelity SEP-IRA 2026 — Limits, Setup & Comparison
- Fidelity Investments — Complete Investor Guide 2026
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