You inherited an IRA. A calculator told you this year's minimum is $15,823. So you take $15,823, and you feel like you did the responsible thing. You did the required thing. Those are not the same.
Under the SECURE Act's 10-year rule, the account has to be empty by December 31 of the year containing the tenth anniversary of the owner's death — the IRS's own phrasing. Taking only the minimum each year doesn't shrink that obligation — it postpones it. Nine small withdrawals, then one enormous one. And that last withdrawal is taxed as ordinary income, all of it, in a single calendar year, stacked on top of whatever else you earn that year.
In short: The annual minimum is a floor, not a plan. Under the 10-year rule, minimums-only leaves a balloon distribution in year 10 that can push you into the highest brackets you will ever pay. Spreading roughly level dollars across the window can keep every year in a lower bracket. It also gives up some tax-deferred growth — that trade is the whole decision.
On this page
- Every Calculator Answers the Wrong Question
- First, Which Version of the 10-Year Rule Applies to You
- What the Minimum Actually Does Over Ten Years
- The Tax Bill, Side by Side
- What Smoothing Costs You
- Try It With Your Own Numbers
- When Level Is Not the Right Shape
- The Rules You Still Have to Obey
- What to Do Next
Two Ways to Empty the Same Account
A $500,000 inherited IRA and $80,000 of other income a year. Ten years. Both paths end at zero. Only one of them hands you a single year of income you will never forget.
Minimum only
Nine small years, then a balloon
Year 10 alone: $592,028. 77% of everything you take out, landing in one tax year — and reaching the 37% bracket.
Level dollars
The same account, spread flat
$64,752 every year. The path tops out in the 24% bracket and never reaches 32% — no year that moves your Medicare premium or your credits.
Year 10 is so large that it flattens the rest of the window. Here are years 1 through 9 on their own scale.
Illustration only. Assumes a $500,000 balance, a beneficiary who is 55 in the first distribution year, $80,000 of other ordinary income each year, a single filer taking the $16,100 standard deduction, a flat 5% annual return, and withdrawals taken at year end. Real returns are not flat and your numbers will differ.
Every Calculator Answers the Wrong Question
Search for an inherited IRA calculator and you will find a dozen of them. Enter a balance, a birthday, a date of death, and they return a number: how much you have to withdraw this year.
That number is usually correct. We tested 21 of those calculators against the IRS tables this summer; most get the minimum right. It is also not the number you were looking for.
"What is my minimum" is a compliance question. The IRS asks it, and you have to answer it, and if you answer it wrong there is an excise tax. But almost nobody who inherits an IRA is actually wondering about compliance. They are wondering: how much should I take out this year so that this money costs me the least?
Between those two there is a narrower question with a settled answer: may I take more than the minimum? Yes. The minimum is a floor, not a ceiling, and a beneficiary can empty an inherited IRA in a single afternoon with no early-withdrawal penalty at any age — we cover the permission question on its own page, can I withdraw more than the RMD from an inherited IRA. Read that one if you are checking whether you are allowed to. Read this one if you already know you are allowed to and want to know how much.
Nobody publishes that answer, because it depends on facts a calculator doesn't ask for — your other income, your filing status, whether you are about to retire, whether you are two years from Medicare. There is nothing to benchmark yourself against, either: the IRS publishes retirement income by state, county, and ZIP, but nothing in those files separates a beneficiary draining an inherited account from a retiree taking a routine withdrawal. But the shape of the answer is usually the same, and the shape is what this post is about.
First, Which Version of the 10-Year Rule Applies to You
Before any of this matters, you need to know which set of rules you are under. Two things decide it: when the original owner died, and whether they had already reached their required beginning date.
If the owner died in 2020 or later and you are a "designated beneficiary" who is not an eligible designated beneficiary — an adult child, a niece, a friend, most non-spouses — you are under the 10-year rule. The account must be fully distributed by December 31 of the tenth calendar year after the year of death. (If the owner named no designated beneficiary at all — an estate, a non-see-through trust — you are on a different clock entirely, usually the 5-year rule, and none of the arithmetic below applies unchanged.)
Eligible designated beneficiaries are exempt and can generally stretch distributions over their own life expectancy. Under the SECURE Act these are: a surviving spouse; the owner's minor child (until the child reaches age 21); a disabled individual; a chronically ill individual; and anyone not more than 10 years younger than the owner. If you are one of these, this post is not about you.
Now the fork that trips people up:
| The owner died... | Annual RMDs in years 1–9? | Deadline |
|---|---|---|
| Before their required beginning date | No. You can take nothing until year 10 if you want. | Dec 31 of year 10 |
| On or after their required beginning date | Yes. An annual RMD is required in each of years 1 through 9. | Dec 31 of year 10 |
That second row was genuinely unsettled for four years. The IRS proposed it in 2022, practitioners argued that the 10-year rule replaced annual distributions entirely, and the agency waived the excise tax on those missed annual distributions for 2021 through 2024 in a run of notices (2022-53, 2023-54, and 2024-35). The final regulations — T.D. 10001, published in the Federal Register on July 19, 2024 — came down on the side of requiring them, and apply for determining required minimum distributions for calendar years beginning on or after January 1, 2025.
Two things about that relief are easy to get wrong. It did not require anyone to make up the skipped distributions, and it did not push back the ten-year deadline by a single day. If you inherited in 2020 and skipped four years of annual RMDs under the notices, you have not gained four years. You have lost four years of room to spread the money out.
So if you inherited from someone who was already taking their own RMDs, you now have both obligations at once: an annual minimum and a hard emptying deadline. If you inherited from someone who died before their required beginning date, you have only the deadline — total freedom in the shape of your withdrawals, and no calculator will tell you what to do with it.
Either way, the ten-year deadline is the binding constraint. The annual minimum, where it applies, is small enough that it barely dents the balance.
What the Minimum Actually Does Over Ten Years
Here is the arithmetic behind the chart above, so you can see why the balloon is so large.
The annual minimum for a beneficiary in the post-RBD case is your prior-year December 31 balance divided by a life expectancy factor from IRS Publication 590-B, Appendix B, Table I — "Single Life Expectancy (For Use by Beneficiaries)." You look up your age in the first distribution year, take that factor, and subtract one from it each year after. A beneficiary who is 55 in the first distribution year starts with a factor of 31.6.
(One wrinkle: if the owner died on or after their required beginning date, you use the longer of your own single life expectancy or the owner's remaining life expectancy. For a beneficiary much younger than the owner — the common case — that is your own, so the illustration below uses it. If you are close to the owner's age or older, check which one applies.)
Dividing a balance by 31.6 takes out about 3.2% of it. A portfolio that earns 5% grows faster than that. So for the first several years, taking the minimum means the account gets bigger, not smaller.
A 5% return outruns a 3.2% withdrawal, so nine years of minimums leave more in the account than you started with.
Balance remaining at the end of each year. The minimum-only path peaks at $563,836 in year 9 — every dollar of which has to come out the following December.
| Year | Minimum-only distribution | Level-dollar distribution | Balance left, minimum only |
|---|---|---|---|
| 1 | $15,823 | $64,752 | $509,177 |
| 2 | $16,640 | $64,752 | $517,996 |
| 3 | $17,500 | $64,752 | $526,396 |
| 4 | $18,405 | $64,752 | $534,311 |
| 5 | $19,359 | $64,752 | $541,667 |
| 6 | $20,363 | $64,752 | $548,387 |
| 7 | $21,421 | $64,752 | $554,385 |
| 8 | $22,536 | $64,752 | $559,568 |
| 9 | $23,711 | $64,752 | $563,836 |
| 10 | $592,028 | $64,752 | $0 |
| Total withdrawn | $767,786 | $647,523 | — |
Illustration only — $500,000 starting balance, beneficiary age 55 in the first distribution year, flat 5% annual return, withdrawals taken at year end. Your factors, balance, and returns will differ.
Look at the last row before the total. Year 10 is not a distribution. It is a liquidation event. 77% of everything this account ever pays you arrives in a single January-to-December window, and every dollar of it is ordinary income.
The Tax Bill, Side by Side
Every dollar out of a traditional inherited IRA is ordinary income, and ordinary income is taxed in layers. You fill up the 10% bracket, then the 12%, then the 22%, and so on. A distribution doesn't get taxed at "your rate" — it gets taxed at whatever rates it happens to reach as it stacks on top of your other income. If you want that arithmetic worked through for a single year in isolation, we do it here; this section is about what ten of those years look like next to each other.
That is the whole argument. Nine years of small distributions leave the low brackets half empty. Year 10 then has to climb through every bracket at once.
Say you are single, you take the standard deduction, and you have $80,000 of other income every year. Under the minimum-only path, years 1 through 9 add $15,823 rising to $23,711 on top of that — you stay inside the 22% bracket the whole time. Then year 10 arrives with $592,028 and drags you up through 24%, 32%, 35%, and into the 37% bracket. Under the level-dollar path, each year adds $64,752 and tops out at 24%, every year, forever.
Each distribution stacks on top of $80,000 of other income and is taxed in slices. Both bars use the same dollar scale.
68% of the balloon is taxed at 35% or 37%. A level-dollar year never gets past 24%.
Applying the 2026 federal rate schedule for a single filer, and counting only the tax caused by the distributions themselves:
| Minimum only | Level dollars | |
|---|---|---|
| Total withdrawn | $767,786 | $647,523 |
| Federal tax on those withdrawals | $228,547 | $147,045 |
| Effective rate on withdrawals | 29.8% | 22.7% |
| Highest bracket reached | 37% | 24% |
| Tax in the single worst year | $189,881 | $14,705 |
Illustration only. Assumes the 2026 single-filer brackets and $16,100 standard deduction (Rev. Proc. 2025-32) applied unchanged to all ten years, $80,000 of other income each year, and no state income tax. Brackets are indexed for inflation annually, so holding them fixed overstates the balloon somewhat. Your numbers will differ.
Seven percentage points of effective rate, on a bigger pile of money. And look at the last row: one year carries a $189,881 tax bill — more than the level-dollar path pays in all ten years combined.
The unused low brackets in years 1 through 9 are the loss. They do not carry forward. Every year you leave the 12% and 22% brackets partly unfilled is a year of cheap tax capacity you can never get back.
And brackets are only the visible part. A single enormous year of income can also:
- Push your Medicare Part B and Part D premiums up two years later through the income-related monthly adjustment amount (IRMAA), which is based on your modified AGI from two years prior.
- Make more of your Social Security benefits taxable.
- Trigger the 3.8% net investment income tax on your investment income by lifting your MAGI over the threshold.
- Phase out deductions and credits that are tied to income.
None of those show up in a calculator that only tells you the minimum.
What Smoothing Costs You
Now the part most articles on this subject skip.
Look at the totals in the table again: $767,786 under the minimum-only path versus $647,523 under level dollars. The minimum-only path pays out more money. That is not an error. Leaving the balance inside the IRA lets it compound untaxed for longer, and a decade of tax-deferred growth on a large balance is worth real money.
So smoothing is not free. You are trading tax-deferred growth for a lower tax rate, and you have to compare the two on equal terms — which means asking what you are actually left with at the end.
Take the same illustration, pay the tax each year, and put whatever is left into an ordinary taxable brokerage account earning the same 5% before tax. Assume some drag from taxes on dividends and gains along the way, so call it 4.3% net. Where do you stand at the end of year 10?
The prize is smaller than the tax gap
Left: every dollar that left the IRA, split into federal tax and what you keep. Right: what those kept dollars are worth at the deadline, reinvested at 4.3% after tax.
Smoothing saves $81,502 of federal tax but ends only $38,322 ahead. Deferral claws back the rest.
| Minimum only | Level dollars | |
|---|---|---|
| Federal tax paid over ten years | $228,547 | $147,045 |
| Value of everything you kept, end of year 10 | about $569,600 | about $607,900 |
Same assumptions as above, plus a 4.3% after-tax return on reinvested proceeds. Illustration only.
Smoothing wins here — by roughly $38,500, or about 7%. But notice how much smaller that is than the $81,500 tax difference. Deferral clawed back more than half of it. That gap is the size of the prize, and it is sensitive to every assumption in the table. Push the reinvestment return up and the advantage shrinks further. Push the balloon year deeper into the 37% bracket and it widens.
Which side wins depends on:
- How wide the bracket gap is. If minimums-only would send you from 22% to 37%, the rate savings are enormous and smoothing wins easily. If you are already in the top bracket and always will be, there is far less to gain and the deferral may win.
- Your return assumption. Higher expected returns make deferral more valuable and weaken the case for pulling money out early.
- What you do with the withdrawn money. If it sits in a taxable brokerage account earning the same return, you lose only the drag of paying tax on dividends and gains along the way — not the whole return. If it sits in cash, you lose more.
- What happens to tax rates. Nobody knows. Taking money out at a known rate today instead of an unknown rate in year 10 has value that is hard to put a number on.
The reason level-dollar smoothing is a good default is not that it always wins. It is that it never blows up. The minimum-only path has a specific, predictable failure mode — one catastrophic year — and level dollars removes it. Starting from level and adjusting is a better process than starting from the minimum and hoping.
Try It With Your Own Numbers
The illustration above uses one balance, one age, and one flat return. Yours are different. Put your own in:
Start with your floor. The SimpleRMD calculator gives you the required minimum for your inherited IRA, with the table, the factor, and the regulation behind it. Divide your balance by the years left in your window for the level-dollar figure, then compare the two against your own income.
Illustration, not advice: treat the output as a starting point for a conversation, not a filing position. It cannot see your state income tax, your capital gains, your spouse's income, or the year you plan to retire — and any one of those can change the answer.
When Level Is Not the Right Shape
Level dollars is a neutral starting shape precisely because it ignores everything about your life. Sometimes that is exactly wrong.
Front-load if your income is about to go up. If you are 60 and working now but expect a large pension, Social Security, and your own RMDs at 73, your cheapest years may be behind you inside this window. Take more early.
Back-load if your income is about to go down. If you retire in year 3 of the window, years 4 through 10 may sit in much lower brackets. Take less now and more later — but be careful, because back-loading is how the balloon problem starts. Level out over the remaining years rather than deferring to the end.
Take a large chunk in a single low year. A gap year between employment and Social Security, a year with a big deductible medical expense, a year of business losses — these are cheap tax capacity that expires December 31. Fill them.
Watch the cliff years. The two years before you enroll in Medicare determine your IRMAA surcharge, since it is based on your MAGI from two years earlier. A big distribution in one of those years costs you twice.
Coordinate across multiple inherited accounts. If you inherited more than one IRA from the same person, you may aggregate the required minimums and take the total from one of them. You may not aggregate across accounts inherited from different people, and you may never satisfy an inherited IRA's requirement out of your own IRA. Check Publication 590-B before you assume.
The Rules You Still Have to Obey
Smoothing is a planning choice layered on top of requirements that are not optional.
- The deadline is real. December 31 of the year containing the tenth anniversary of the owner's death. If the owner died in 2025, the account must be empty by December 31, 2035. There is no extension.
- The annual minimum is a floor, not a target. In the post-RBD case you must take at least the minimum in years 1 through 9. Taking more is always allowed. Taking less is not.
- Missing an RMD costs 25% of the shortfall as an excise tax, reduced to 10% if you correct it within the correction window under the SECURE 2.0 Act. You report and, if applicable, request a waiver on Form 5329.
- The owner's own final-year distribution is your problem too. If they died on or after their required beginning date without having taken that year's RMD, it still has to come out for the year of death — and the beneficiary is the one who takes it.
- You cannot roll an inherited IRA into your own unless you are the surviving spouse. A non-spouse beneficiary who takes the money out cannot put it back.
- Your deadline is inheritable; a fresh ten years is not. If you die partway through the window, your successor beneficiary finishes out your clock rather than starting a new one. Deferring everything to year 10 hands them a balloon on a schedule they did not choose.
- Inherited Roth IRAs still have the 10-year deadline even though qualified distributions are tax-free. The math above is about ordinary income tax, so a Roth changes the answer completely — with no tax cost to timing, you generally want to leave it in as long as the rules allow.
- December 31 means settled, not requested. Custodians have internal cutoffs, often weeks earlier. See what must happen by December 31.
What to Do Next
- Run the calculator — free, no account required. Get your required minimum first, so you know your floor.
- Find your regime. Confirm whether the original owner died before or on/after their required beginning date. Everything else follows from that one fact, and the custodian's records or the final tax return will tell you.
- Write down the deadline. December 31 of the year containing the tenth anniversary of the death. Put it somewhere you will see it in year 8, when it starts to matter.
- Sketch your own income over the next ten years — retirement date, Social Security start, Medicare enrollment. Circle the low years. Those are where the extra dollars should go.
- Take the plan to a tax professional before year 1 rather than year 9. The cheapest year to fix this is the first one.
This article is for informational purposes only and does not constitute tax, legal, or financial advice. All dollar figures are illustrative and were produced under stated simplifying assumptions; they are not a projection of your results. IRS rules and tax laws are subject to change. Consult a qualified tax professional or financial advisor for guidance specific to your situation. SimpleRMD is a calculation and tracking tool — not a financial advisory service.
Sources: IRS.gov (Publication 590-B, Distributions from Individual Retirement Arrangements (IRAs), including Appendix B, Table I, Single Life Expectancy; Retirement Plan and IRA Required Minimum Distributions FAQs; Required Minimum Distributions for IRA Beneficiaries). Publication 590-B cited is the revision for use in preparing 2025 returns. Final regulations T.D. 10001, "Required Minimum Distributions," 89 Fed. Reg. 58886 (July 19, 2024), reprinted at Internal Revenue Bulletin 2024-33. Excise tax relief for 2021–2024: IRS Notices 2022-53, 2023-54, and 2024-35. Federal rate schedule and standard deduction for 2026: Rev. Proc. 2025-32. SECURE Act (Pub. L. 116-94), SECURE 2.0 Act of 2022 (Pub. L. 117-328). Rules confirmed current as of September 2026.