Inherited IRA 10-Year RMD: SECURE Act Drawdown Strategy

The death of the stretch IRA

Before the SECURE Act, a non-spouse heir could "stretch" an inherited IRA over their own life expectancy — a 30-year-old inheriting from a parent could spread distributions across 50+ years, minimizing each year's tax hit and letting most of the balance keep growing tax-deferred. SECURE 2019 ended that. Non-spouse beneficiaries who inherit after 2019-12-31 must empty the inherited IRA within 10 years. The strategy question shifted from "what's my optimal lifetime stretch?" to "how do I distribute this over a fixed 10-year window without bracket-stacking myself into a high tax year?"

The three preset strategies — equal annual, lump year 1, lump year 10 — span the obvious extremes. At a single flat marginal rate, the math favors waiting (the IRA grows tax-deferred until withdrawal, so lump year 10 retains the most), but real tax brackets compress at low income and stack at high income, so a tax-aware bracket-filling schedule almost always beats all three presets. This tool gives you the comparison; for the real plan, a tax pro will model your specific income trajectory.

How the math works

1. Equal annual: each year withdraw balance / (years remaining), and the residual grows at the chosen rate. This schedule empties the account at year 10 cleanly.
2. Lump year 1: withdraw the entire balance immediately. Highest one-year tax bill but zero subsequent growth.
3. Lump year 10: let the balance grow tax-deferred for 9 full years, withdraw it all at the end. Maximum nominal withdrawal but lands the entire 10-year appreciation in one tax year.
4. Tax: each strategy multiplies its total withdrawal by the beneficiary's flat marginal rate.
5. Best strategy: the highest net retained among the three.

Sources: SECURE Act 2019 (P.L. 116-94), SECURE 2.0 Act 2022 (P.L. 117-328), IRS Pub 590-B, IRS Notice 2024-35 on the 2021-2024 RMD-penalty waiver.

The big simplification: the flat marginal rate. Real tax brackets are progressive, so lump year 1 or year 10 can push the beneficiary from a 22% bracket into the 32% or 35% bracket on the lump year. A tax-aware schedule fills up the 12%/22%/24% brackets each year, often retaining 5-10% more than the flat-rate best preset. This tool ranks the three presets honestly at the flat rate you input — for the real plan, talk to a tax professional.

Math runs locally. Inputs never leave your browser. Source on github.

Where this calculation doesn't apply

• Spouse beneficiary. Spouses can roll the inherited IRA into their own IRA and treat it as their own — no 10-year rule, take RMDs based on their own age. The whole comparison is moot.
• EDB beneficiary. Eligible Designated Beneficiaries (minor children of the deceased, disabled / chronically ill, beneficiaries within 10 years of the deceased's age) can stretch over their own life expectancy. The 10-year rule doesn't apply.
• Roth inherited IRA. The 10-year rule applies, but withdrawals are TAX-FREE (assuming the Roth was open ≥ 5 years before the death). Strategy reverses: take as much as possible as early as possible to maximize tax-free compounding outside the inherited Roth. Or wait — both have the same total return; user preference rules.
• Variable income trajectory. Mid-career beneficiaries facing 10 years of stable income → tax-aware bracket-filling works well. Beneficiaries planning to retire mid-window → wait until lower-bracket retirement years. Beneficiaries planning a big income bump → take more early. The flat-rate model doesn't capture this.
• Charitable distribution. Some beneficiaries route inherited IRA distributions through a Donor-Advised Fund or CRT for tax efficiency. Different math, not modeled here.

What to actually do

1. Verify beneficiary classification — non-spouse, EDB, or spouse — with the IRA custodian. This determines whether the 10-year rule even applies.
2. Establish the inherited IRA in your name as an "inherited IRA for the benefit of [you] as beneficiary of [decedent]" — NOT in your own IRA. Distributions from the wrong account type can disqualify the inheritance treatment.
3. Pick a tentative strategy in year 1: usually equal annual to spread bracket exposure, unless you have a known income drop (retirement) coming inside the 10-year window.
4. Re-evaluate annually. Income trajectory shifts; bracket-filling math changes. Don't commit to a strategy on day 1 and never reconsider.
5. For balances over ~$500K, the tax savings from a bracket-aware schedule usually pay a tax pro's fee many times over. For smaller balances, equal annual is the safe default.