The Average Inherited IRA Comes With a 10-Year Fuse. Year One Is When Heirs Make the Big Mistake.

This article analyzes the tax pitfalls of inheriting an IRA under the SECURE Act, which requires most non-spouse heirs to fully drain the account within 10 years. The most common Year 1 mistake is withdrawing the entire balance immediately, pushing the heir into a higher tax bracket, or taking no distributions and forgetting the 10-year clock. A February 2022 IRS clarification added that heirs inheriting from owners already taking RMDs must also take annual distributions. The article advises spreading withdrawals evenly over 10 years to minimize taxes and allow tax-deferred growth. It cites Fidelity data showing an average IRA balance of $146,400 and notes current economic pressures like a 3.9% personal savings rate and 21% average credit card APR that may tempt heirs to cash out early.