The short answer
For many non-spouse beneficiaries, an inherited IRA balance must be fully distributed by the end of the tenth year after death. If the owner died on or after the required beginning date, annual distributions generally continue during years 1–9 as well. An annuity contract inside the IRA still has to support the required timing.
Two rulebooks apply
An IRA annuity is an annuity contract held inside an IRA. The beneficiary must satisfy both the federal inherited-IRA distribution rules and the insurer's contract procedures. A settlement election that appears permissible under the contract cannot override an earlier tax deadline.
For a deeper account-structure explanation, see The Trusted Advisor's annuities in IRAs guide.
The post-SECURE 10-year rule
The IRS says that for defined-contribution participants or IRA owners who died after 2019, the SECURE Act generally requires the entire account to be distributed within ten years. Exceptions can apply to eligible designated beneficiaries, including certain disabled or chronically ill people, minor children of the owner, and beneficiaries not more than ten years younger than the owner.
Use the IRS's current RMD FAQs and the 2024 final regulations, not a pre-SECURE “stretch IRA” summary.
When annual distributions may be required
If the owner died on or after the required beginning date, the final regulations generally require annual beneficiary distributions to continue while the 10-year deadline also applies. If the owner died before that date and the 10-year rule applies, the rules can permit more flexibility within the window, but the account must still be emptied on time.
The owner's year-of-death RMD, if not already taken, is a separate item. Have the custodian or administrator confirm it in writing.
Where the annuity contract can create friction
- A payout schedule may extend beyond the tax-law deadline.
- Surrender charges or market-value adjustments may affect liquidity.
- An income rider's benefit base may not be available as a lump sum.
- The insurer and IRA custodian may have separate forms and processing times.
- A non-spouse beneficiary generally cannot treat the inherited IRA as their own.
A practical beneficiary checklist
- Confirm the owner's date of death and required beginning date.
- Confirm whether the recipient is a designated or eligible designated beneficiary.
- Ask whether a year-of-death RMD remains unpaid.
- Obtain the annuity's surrender value, death benefit, basis records, and settlement menu.
- Map every contract election against annual RMDs and the final distribution deadline.
- Keep beneficiary titling intact; do not deposit an inherited-IRA distribution into the beneficiary's own IRA without qualified advice.
Frequently asked questions
Does the 10-year rule mean I can wait until year 10?
Not always. If the owner died on or after the required beginning date, annual beneficiary distributions generally apply during the 10-year period.
Can an annuity payout run longer than ten years?
A contract may describe longer payouts, but the inherited-account tax rules can require faster distribution. Both layers must be satisfied.
Can a non-spouse roll an inherited IRA annuity into their own IRA?
Generally no. Non-spouse inherited accounts have special titling and transfer rules; an ordinary 60-day rollover is not the same as a trustee-to-trustee inherited-IRA transfer.