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Updated July 28, 2026. Quick answer: Emptying the account is not one decision but ten. Waiting lets the balance compound untaxed, but ten years of withdrawals in a single tax year is what drives your rate up — and the rate effect usually wins.
Emptying an inherited account within ten years is not one decision — it is ten. Where you put the income across those years usually matters more than anything else about the account.
Why the lump usually loses
Waiting lets the account compound untaxed, which is genuinely worth something. But ten years of withdrawals landing in one tax year is precisely what drives a marginal rate upward, and the rate effect is usually larger than the compounding effect. The calculator asks you for both rates separately for exactly that reason — most tools quietly assume they are the same, which is the assumption that makes waiting look good.
The question that decides everything: when did they die relative to their RBD?
Almost every summary of the 10-year rule tells you there are no annual withdrawals — just empty the account by the end of year ten. That is only true for half the situations.
| The person you inherited from died… | Annual RMDs in years 1–9? |
|---|---|
| On or after their required beginning date | Yes — required, in addition to emptying by year 10 |
| Before their required beginning date | No — take any amount in any year, empty by year 10 |
The 2024 final regulations, published 19 July 2024, settled this after years of uncertainty. Because the IRS had waived beneficiary RMDs for 2021 through 2024, the requirement only starts biting from 2025 — which means a very large group of beneficiaries has never taken one and does not know they now must.
Missing a required distribution triggers a 25% excise tax on the shortfall — reduced from 50% by SECURE 2.0 — and reducible to 10% if corrected promptly. Confirm the correction window with a preparer; it is short.
⚠️ An inherited annuity is not governed by this rule. The ten-year rule reaches defined-contribution plans; a nonqualified annuity bought with after-tax money sits outside it — why the ten-year rule does not apply to a nonqualified annuity. The payout choices that do apply are compared at lump sum versus five-year versus life expectancy.
What the arithmetic cannot see
State tax. IRMAA surcharges two years after a large withdrawal. ACA subsidy cliffs if you are not yet on Medicare. And your own income across the decade — a retirement year or a low earning year is worth more than any even-spreading rule of thumb.
Ten years is the deadline. The schedule inside it is entirely yours to choose.
Drawing evenly, front-loading or waiting produce very different lifetime tax on the same account. That is a multi-year planning question, and the advisers below pay to be introduced to people facing it. It is free to you, and it is not the only way to find an adviser.
Before you start, what actually happens. The form is run by Kapitalwise, our advisor-matching partner. Kapitalwise sends your details to advisers who pay for the introduction, so expect calls and texts. Clear Money Guide is paid when you submit the form, whether or not you ever hire anyone. This is free to you and there is no obligation to hire anyone.
The Kapitalwise form opens here — you stay on this page.
What happens when you press the button
It asks about nine questions — age, investable assets, location — then your name, email and phone number, and verifies the phone by text. Nothing loads and nothing reaches Kapitalwise until you press the button.
Sources
Final regulations on required minimum distributions, published 19 July 2024; SECURE Act (2019) and SECURE 2.0 (2022); IRC §401(a)(9). Cross-checked July 2026 against professional analyses from Kitces, Grant Thornton, Ascensus, Charles Schwab and Kiplinger. Specific IRS notice numbers for the 2021–2024 waivers, and the exact correction window for reducing the missed-RMD excise tax, should be confirmed against primary source before you rely on them.
This states what the cited authority says. It is not tax advice, and inherited account rules turn on facts about the decedent that no page can verify for you.
Related
Which distribution path costs least in total tax
The calculator above shows what the drawdown looks like. This one answers the question underneath it: given your rate now and the rate you expect later, which way of emptying the account costs least in total tax? Brokerage tools compute the required minimum. Almost nothing computes the comparison.
Why rates are inputs rather than a built-in bracket table. Bracket thresholds are indexed annually, and a table baked into a page goes stale silently. Your own marginal rate is the number that actually drives this decision, and you know it better than a lookup does — it is on last year’s return. The comparison is only as good as the rates you give it, which is the honest trade.
The pattern the table usually shows: if your rate drops later, waiting helps — but only up to the point where the year-10 forced distribution spikes you into a higher bracket than you ever avoided. That is the trap the “just wait” advice misses, and it is why the fill-to-a-cap path so often wins outright.