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.
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.
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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.