Your client, age 76, dies in 2026 after taking her RMD for the year. She leaves her traditional IRA to her 50-year-old son. He is subject to the 10-year rule. Does he need to take annual distributions in years 1-9?
Think about it for a moment. Most candidates get this wrong.
The answer is yes. Because the original owner died after her Required Beginning Date (RBD), a non-eligible designated beneficiary must take annual RMDs based on their own life expectancy during the 10-year period, before liquidating the account by the end of year 10. Forgetting this single detail is a classic trap that separates a passing score from a failing one. You can master these nuances with focused, adaptive practice on the VoraPrep CFP platform.
The most critical inherited IRA rule under SECURE 2.0 is that if the original owner dies after their Required Beginning Date (RBD), a non-eligible beneficiary must take annual RMDs during the 10-year liquidation period. If the owner dies before their RBD, no distributions are required until the final year.
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Key facts
- Governing Standard
- IRC § 401(a)(9) and subsequent SECURE Acts
- Exam Section
- Retirement Savings and Income Planning (17% of exam)
- SECURE 2.0 RMD Age (Born 1951-1959)
- 73
- SECURE 2.0 RMD Age (Born 1960+)
- 75
- Penalty for Missed RMD
- 25% of the shortfall (can be reduced to 10% if corrected timely)
- Official Body
- CFP Board
The CFP Board reports a pass rate that consistently hovers between 60-65%, demonstrating that a significant number of candidates are not prepared for this level of detail (CFP Board).
The Core RMD and Inherited IRA Rules for the CFP Exam
The foundation of these questions is IRC § 401(a)(9), which mandates that retirement account owners must start taking distributions at a certain age. The SECURE Act of 2019 and SECURE 2.0 Act of 2022 dramatically changed these rules, especially for beneficiaries. The CFP exam will test your ability to navigate these recent changes for different client profiles.
This isn't just about memorizing a date. It’s about applying the rules correctly under pressure, which is a core competency under the CFP Board's Fiduciary Duty (Standard of Conduct A.1). Giving wrong advice on an RMD has immediate, costly consequences for a client.
SECURE 2.0 RMD Ages
You must know the current RMD age brackets cold. The exam will give you a client's birthdate and expect you to know their Required Beginning Date (RBD).
| Birth Year Range | RMD Age | Required Beginning Date (RBD) |
|---|---|---|
| June 30, 1949 or earlier | 70.5 | (Pre-SECURE Act) |
| July 1, 1949 - Dec 31, 1950 | 72 | (SECURE 1.0) |
| 1951 - 1959 | 73 | April 1 of year after turning 73 |
| 1960 or later | 75 | April 1 of year after turning 75 |
The most common trap is using an old age. If a question gives you a client born in 1955, their RMD age is 73, not 72 or 75.
The RMD Calculation and Penalty
The RMD calculation itself is a straightforward formula that you must be able to execute.
The Life Expectancy Factor is found using the IRS Uniform Lifetime Table for account owners. Beneficiaries use the Single Life Table.
The penalty for failing to take an RMD is severe, making it a high-stakes area for planners. SECURE 2.0 reduced the penalty from 50% to 25%. If the mistake is corrected within a specific "correction window" (generally two years), the penalty is further reduced to 10%. Expect questions that require you to calculate the penalty on a shortfall.
The 10-Year Rule for Inherited IRAs
This is the most complex and heavily tested area. The SECURE Act eliminated the "stretch IRA" for most beneficiaries, replacing it with the 10-year rule. This rule requires the entire balance of the inherited account to be distributed by the end of the 10th year following the year of the original owner's death.
The critical exception is for Eligible Designated Beneficiaries (EDBs).
Who is an EDB?- Surviving Spouse
- Minor child of the decedent (rule changes when they reach age 21)
- Disabled individual
- Chronically ill individual
- An individual not more than 10 years younger than the decedent
EDBs can still use the "stretch" method, taking distributions over their own life expectancy. All other individual beneficiaries ("Non-EDBs") are subject to the 10-year rule.
- If the owner died BEFORE their RBD: The non-EDB can wait until the end of the 10th year to take the full distribution. No annual RMDs are required in years 1-9.
- If the owner died ON or AFTER their RBD: The non-EDB must take annual RMDs in years 1-9 based on their own life expectancy, and still empty the account by the end of year 10.
This nuance is a prime target for exam questions designed to test judgment over simple recall.
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Your 7-Day Sprint to Master RMDs and Inherited IRAs
Feeling overwhelmed? Don't be. You can master this topic with a focused, one-week sprint. Forget passive reading. This is about active problem-solving. Try VoraPrep's adaptive practice questions to target your weak spots as you go.
Step 1: Day 1 - Lock Down the Ages
Your only job today is to master the RMD age table. Create flashcards for the birth year cutoffs (1951, 1960). Do 10 practice problems where you are given a birthdate and must identify the correct RMD age.Step 2: Day 2 - Drill the Calculation
Focus on the RMD formula. Use the IRS Uniform Lifetime Table (you don't need to memorize the table, but know how to use it). Calculate the RMD for a 75-year-old with a $1.2M IRA. Then, calculate the 25% penalty for a $20,000 shortfall.Step 3: Day 3 - Define the Beneficiaries
Today is all about the EDB definition. Write down the five categories from memory. Create a scenario for each (e.g., a disabled sibling, a minor child). This moves the rule from abstract text to concrete client situations.Step 4: Day 4 - Conquer the 10-Year Rule
This is the big one. Create a flowchart for a non-EDB. The first question: "Did the owner die before or after their RBD?" Branch the logic from there. This visual map is more powerful than rereading the rule 20 times.Step 5: Day 5 - Handle Special Cases
Review the rules for inherited Roth IRAs (qualified distributions are still tax-free, but the 10-year rule still applies to distributions) and the still-working exception (for qualified plans like 401(k)s, not IRAs).Step 6: Day 6 - Integrated Practice
Now, put it all together. Do a 30-question quiz exclusively on RMDs and beneficiary rules. VoraPrep's question bank has over 6,900 questions, allowing you to build custom quizzes that hit these topics hard. Analyze every wrong answer and understand the logic of the trap. You can see how we stack up against other providers on our comparison page.Step 7: Day 7 - Teach It Back
The final test of mastery is teaching. Explain the entire process—from RMD age to the 10-year rule nuance—to a study partner, a family member, or even VoraPrep's Vory tutor. If you can explain it clearly, you own it.Worked Example: Inherited IRA Distribution
Let's walk through a full, exam-style problem. This integrates multiple concepts and shows how the examiner tests your thinking process.
| Age | Life Expectancy |
|---|---|
| 56 | 29.6 |
| 57 | 28.7 |
| 58 | 27.8 |
Step 1: Analyze the Players and Dates
- Decedent: Maria, born 1950. Per our chart, her RMD age was 72. She was well past her RBD when she died in 2026 at age 75/76. This is the critical fact.
- Beneficiary: David, age 55. He is not a minor child, disabled, chronically ill, or close in age. He is a Non-Eligible Designated Beneficiary.
- Rule: Because he is a Non-EDB and Maria died after her RBD, David is subject to both annual RMDs and the 10-year liquidation rule.
Step 2: Identify the Correct Calculation
David's RMD for 2027 will be based on the prior year-end balance and his life expectancy. In 2027, David will be 57 (he turns 56 in 2026, the year of death). We use his age in the year of the distribution.Step 3: Perform the Calculation
- Prior Year-End Balance (Dec 31, 2026): This is a trick. The question gives the Dec 31, 2025 balance. We must first account for Maria's final RMD for 2026, the year she died. Since she died before taking it, David must take it on her behalf by Dec 31, 2026. Let's assume Maria's 2026 RMD (based on her age and the Uniform Lifetime Table) was $40,000. The year-end 2026 balance would be ($950,000 - $40,000), assuming no market movement for simplicity = $910,000.
- David's Age in 2027: 57
- Life Expectancy Factor (from table): 28.7
- Calculation: $910,000 / 28.7 = $31,707.32
This is David's RMD for 2027. He must continue taking RMDs for years 2-9 and distribute the remainder by the end of 2036.