Inherit a Parent’s $200,000 IRA at 62 and Take Nothing the First Year. If They Had Already Started RMDs, the IRS Wants One Every Year, and the Fine on the Missed One Is About $2,000
Most people who inherit a traditional IRA assume they control the timing of withdrawals, but one detail about the previous owner's account can lock heirs into a mandatory annual schedule with penalties that start immediately and grow every year.
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Fidelity’s latest retirement analysis puts the average IRA balance at a record $144,523 in the second quarter, up 10% from the previous year. Much of that money is held by people in their 70s and 80s and will increasingly pass to adult children approaching retirement.
Inheriting a $200,000 traditional IRA at 62 comes with rules about when the money must come out. Kiplinger reviewed the beneficiary distribution rules on September 28, 2026, including the withdrawal requirements heirs must follow.
One Detail Decides Whether Annual Withdrawals Apply
Under the SECURE Act, most non-spouse heirs who inherited after January 1, 2020, must empty the account within 10 years. What they owe depends on one fact: whether the parent had reached their required beginning date for withdrawals before dying. If the parent died before that date, the heir can take any amount at any time, as long as the account is empty by the end of year 10. If the parent died on or after it, the heir must take annual required minimum distributions (RMDs) in years 1 through 9, based on the heir’s own life expectancy.
Suze Orman outlined the IRS position. Heirs “had to start the year after the owner died to continue to take required minimum distributions based on your life expectancy, and that by the end of the 10th year, the entire account had to be wiped clean.” For years, many heirs missed these withdrawals without penalty because the IRS waived them for 2021, 2022, 2023, and 2024. That relief ended. Enforcement resumed in 2025.
How a Skipped Year Becomes a $2,000 Bill
The first required withdrawal comes in the calendar year after the parent dies, and the heir’s age in that year sets the divisor. A beneficiary who was 62 at the parent’s death turns 63 the next year. The IRS Single Life Expectancy Table gives age 63 a factor of 24.5.
Dividing $200,000 by 24.5 gives a required withdrawal of about $8,163, around 4% of the account. Under SECURE 2.0, skipping that withdrawal triggers a 25% excise tax on the amount that should have come out, or about $2,041. The penalty is extra; the heir still must take the money out and pay ordinary income tax on it.
Fixing the mistake within the two-year correction window cuts the penalty to 10%, or about $816. In some cases, the IRS may waive the penalty entirely if the missed withdrawal resulted from a reasonable error and the heir corrects the shortfall.
Who Is Exempt From the Annual Schedule
Some beneficiaries have more flexible options. In the case of surviving spouses, children under 21, heirs who are disabled or chronically ill, and anyone no more than 10 years younger than the deceased are exempt. A 62-year-old inheriting from a parent in their 80s typically fits none of these groups and must follow the annual requirement.
Each Year the Required Withdrawal Gets Bigger
Each year, non-spouse heirs set the new divisor by subtracting one from the prior year’s divisor. Year two uses 23.5 instead of 24.5, so the required withdrawal rises every year even if the balance stays the same. By the final years, minimums make up a larger share of the remaining balance.
Taking only the minimums leaves a large balance for year 10, when everything must come out. Orman warned that heirs would be “taxed if it’s a traditional retirement account, all at one time.” For a 62-year-old, year 10 falls in their early 70s, when Social Security and their own retirement withdrawals may already raise income. This is one of several IRS rules that quietly drain retirement accounts, and we mapped out the rest in a free report here.
What to Do in the First Year After Inheriting
- Confirm whether the parent had started RMDs. The custodian’s record shows which version of the 10-year rule applies.
- Set up automatic distributions. Ask the custodian to send the required amount every year before December 31, from year 1 through year 9.
- Spread withdrawals beyond the minimum when it makes sense. Taking extra in lower-income years can keep a large year-10 withdrawal from pushing income into a higher bracket.
The rule is now clear after years of confusion. If the parent had started withdrawals, the heir must take one every year, and each missed year on a $200,000 account costs about $2,000 in penalties. Anyone who confirms the parent’s RMD status in the first year and sets up the annual withdrawals can avoid that cost.
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David Beren has been a Flywheel Publishing contributor since 2022. Writing for 24/7 Wall St. since 2023, David loves to write about topics of all shapes and sizes. As a technology expert, David focuses heavily on consumer electronics brands, automobiles, and general technology. He has previously written for LifeWire, formerly About.com. As a part-time freelance writer, David’s “day job” has been working on and leading social media for multiple Fortune 100 brands. David loves the flexibility of this field and its ability to reach customers exactly where they like to spend their time. Additionally, David previously published his own blog, TmoNews.com, which reached 3 million readers in its first year. In addition to freelance and social media work, David loves to spend time with his family and children and relive the glory days of video game consoles by playing any retro game console he can get his hands on.
