He Inherited His Father’s $220,000 IRA at 60 and Took Nothing for Nine Years. Year 10 Landed on Top of His Own Salary, in the 32% Bracket.

An inherited IRA is a retirement account passed to a beneficiary after the original owner dies. When the beneficiary is an adult child, the rules governing how quickly the money must be withdrawn have changed significantly under the SECURE Act. The scenario in the headline involves a son who inherited a $220,000 IRA at age 60, deferred all withdrawals, and then faced a forced distribution in year 10 that landed him in the 32% federal bracket. It sits on a specific IRS rule that many beneficiaries continue to misread.

Why the 10-Year Rule Applies Here

Under the SECURE Act, most non-spouse beneficiaries must empty an inherited IRA by the end of the tenth year following the original owner’s death. The only exceptions fall into a category known as eligible designated beneficiaries, or EDBs. That group includes surviving spouses, minor children of the decedent, disabled or chronically ill beneficiaries, and anyone who is not more than ten years younger than the person who passed away. A 60-year-old adult son inheriting from his father does not fit any of those categories, so he is subject to the standard 10-year rule rather than a life-expectancy stretch.

Nine Years of Nothing: Legal or Not?

Whether he could legally take zero for nine years depends on one fact that is easy to overlook: whether his father died before, on, or after the required beginning date, the date the original owner would have had to start required minimum distributions.

• If the father died before his required beginning date, no annual distributions are required during years one through nine. The beneficiary can wait and empty the account in year 10. The headline scenario is legal.
• If the father died on or after his required beginning date, the beneficiary must take annual required distributions in years one through nine and empty the account by the end of year 10. Skipping those annual RMDs triggers a 25% excise tax on the shortfall, reduced to 10% only if the error is corrected within a two-year window.

The IRS confirmed this two-track structure in final regulations issued in July 2024 (T.D. 10001), effective January 1, 2025. Before those regulations took effect, the agency issued a series of notices waiving enforcement of the annual distribution requirement for years 2021 through 2024 while the rules were being finalized. That grace period has expired. For beneficiaries whose decedent died on or after the required beginning date, annual RMDs are now fully enforced. For the son in this scenario to have legally taken nothing for nine years, his father must have died before that date.

Why Year 10 Landed in the 32% Bracket

Distributions from an inherited IRA are taxed as ordinary income, stacking directly on top of wages rather than receiving the preferential rates that long-term capital gains enjoy. For tax year 2026, the 32% bracket begins above $201,775 for single filers and $403,550 for married couples filing jointly, per IRS Revenue Procedure 2025-32.

Median weekly earnings for full-time workers came in at $1,251 in the second quarter of 2026, according to the Bureau of Labor Statistics. A working 60-something with a professional salary may already be sitting well up the bracket ladder before any inherited IRA money arrives. Compressing an entire inherited account into a single distribution is precisely what pushes the marginal rate into that higher zone. Spreading the same total across ten years would have allowed a larger share of it to clear at lower marginal rates.

What a Different Sequence Would Have Looked Like

There is no 10% early withdrawal penalty on inherited IRA distributions, regardless of the beneficiary’s age. That removes the main reason most people delay tapping retirement accounts. A more tax-efficient path would have included:

1. Spreading distributions across the full ten years to fill the 22% and 24% brackets each year rather than compressing everything into one.
2. Timing larger distributions to a year of reduced income, such as the year of retirement, when a salary is no longer stacking underneath.
3. Coordinating with retirement contributions, using pre-tax 401(k) deferrals to offset part of the inherited income where possible.
4. Redirecting distributions through a qualified charitable distribution (QCD) once the beneficiary reaches age 70½. The 2026 QCD limit is $111,000 per year, and amounts directed to a qualified charity satisfy the RMD without adding to taxable income.

The interest-rate environment is a secondary consideration. The 10-year Treasury yield closed at 4.73% on August 28, 2026, which describes the backdrop the account grew in, but not the account’s actual return. The tax outcome in year 10 was driven entirely by the distribution schedule. A beneficiary who reads the rules early, confirms the required beginning date question, and models the stacking effect against current-year salary will generally finish in a lower lifetime bracket than one who waits until the deadline forces a single large withdrawal (the inherited IRA squeeze is one of several IRS rules that quietly drain six figures from retirement accounts, all charted in a free tax trap map here).

Editor’s note: This article was updated to specify that the IRS transition relief covered distribution years 2021 through 2024 and that full enforcement is now in effect, to add the 25% excise tax rate on missed RMDs (reducible to 10% within a two-year correction window), and to include qualified charitable distributions as a fourth planning strategy with the 2026 annual QCD limit of $111,000.

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