Year-by-year distribution plan under the SECURE Act 10-Year Rule. Compares even-annual, defer-until-year-10, and strategic bracket-filling withdrawal strategies to minimize the inherited IRA tax bomb.
| Year | Age | Starting Balance | RMD Required | Distribution Taken | Federal Tax | Effective Marginal |
|---|---|---|---|---|---|---|
| 1 | 50 | $397K | $13,812 | $125,100 | $26,332 | 21.0% |
| 2 | 51 | $289K | $11,258 | $125,100 | $26,332 | 21.0% |
| 3 | 52 | $173K | $8,415 | $125,100 | $26,332 | 21.0% |
| 4 | 53 | $51K | $5,190 | $125,100 | $26,332 | 21.0% |
| 5 | 54 | $0 | $1,573 | $51,138 | $10,060 | 19.7% |
| 6 | 55 | $0 | — | $0 | $0 | — |
| 7 | 56 | $0 | — | $0 | $0 | — |
| 8 | 57 | $0 | — | $0 | $0 | — |
| 9 | 58 | $0 | — | $0 | $0 | — |
| 10 | 59 | $0 | — | $0 | $0 | — |
The SECURE Act of 2019 fundamentally changed inherited IRA rules. For deaths on or after January 1, 2020, most non-spouse beneficiaries lost the 'stretch IRA' — they can no longer spread distributions over their own life expectancy. Instead, the entire account must be emptied by December 31 of the year containing the 10th anniversary of the original owner's death.
The IRS released final regulations in July 2024 confirming a key wrinkle: if the original owner died after their Required Beginning Date (RBD — the date their own RMDs had started), non-eligible designated beneficiaries must also take annual RMDs in years 1-9 based on the IRS Single Life Expectancy Table. If the owner died before their RBD, no annual RMDs apply — just the 10-year empty-by-end rule.
Eligible Designated Beneficiaries (EDBs) still get the stretch: surviving spouses, minor children of the decedent (until majority), disabled or chronically ill beneficiaries, and individuals not more than 10 years younger than the decedent. Surviving spouses have additional options including treating the IRA as their own, which restarts the entire RMD clock at their age 73 (or 75 for those born 1960+).
The tax bomb risk is real. A $500,000 inherited IRA distributed in equal annual chunks adds roughly $50,000 to each year's income — manageable if you're already at modest income, brutal if you're a high-earning professional already in the 32%+ bracket. Waiting until year 10 means dropping the entire balance into one year's income, which almost always pushes you into the 35% or 37% bracket. Strategic bracket-filling (taking just enough each year to fill the 22% or 24% bracket) usually wins on after-tax dollars retained.
This calculator compares three strategies side by side using actual 2026 federal brackets. The strategic option fills your current bracket each year and takes whatever's left in year 10. The total tax owed under each strategy reveals which approach actually maximizes what passes to you net of federal income tax. State tax is not modeled — it would amplify the differences further in high-tax states.