You Inherited an IRA and the IRS Gives You 10 Years to Empty It. These 3 ETFs Make Every Year Count

Quick Read

• VOO's 303% 10-year return anchors the growth sleeve, while DGRO's dividends have climbed every year, reaching $1.45 per share in 2025.

• JPST's ultra-short bond holdings neutralize sequence risk in years 8-10, when a forced withdrawal after a 20% drawdown becomes a permanent loss.

• Are you ahead, or behind on retirement? SmartAsset's free tool can match you with a financial advisor in minutes to help you answer that today. Each advisor has been carefully vetted, and must act in your best interests. Don't waste another minute; learn more here.

You just inherited an IRA, and the SECURE Act clock is ticking. Under the current 10-year rule, most non-spouse beneficiaries have to empty the account by the end of the tenth year after the original owner's death. That is a real planning problem and a real opportunity. Handled well, this money can grow for most of a decade before you touch it. Handled badly, you either sell at the wrong moment or hand more of it to the IRS than you had to. Three funds can carry the load through every phase of that window: Vanguard S&P 500 ETF (NYSEARCA:VOO) for growth, iShares Core Dividend Growth ETF (NYSEARCA:DGRO) for rising income, and JPMorgan Ultra-Short Income ETF (NYSEARCA:JPST) for the cash you actually need to withdraw.

The 10-Year Squeeze, In Plain English

Your challenge is a barbell. Early years, you want the balance compounding. Late years, you need certainty that the money will be there when you sell. Try to force one fund to do both jobs, and you either leave return on the table or blow up your plan in a bad market. Splitting the account into a growth sleeve, an income sleeve, and a distribution sleeve solves that problem. You draw from the safe bucket while the risk bucket keeps working, and you reset the mix as year 10 approaches.

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VOO: The Growth Engine for Years 1 through 6

VOO tracks the S&P 500. It is as close to owning "the U.S. stock market" as a single ticker gets, and it charges almost nothing to do it. The expense ratio is 0.03%, which means roughly $997 of every $1,000 you invest keeps working for you each year. Over the past year, VOO returned 18.29%, over five years 81.5%, and over the last ten years 303.84%. No fund guarantees a repeat of past performance, but for the first stretch of your 10-year window, when you can afford volatility, this is the compounding vehicle to lean on.