A 61-Year-Old Who Just Inherited an $850,000 IRA and Is About to Hand the IRS $210,000

A 61-year-old working individual inherited an $850,000 traditional IRA from his father. Under the SECURE Act, non-spouse beneficiaries must empty the account within 10 years and take annual Required Minimum Distributions (RMDs) in years one through nine. If he defers distributions and withdraws the full balance in year 10, the federal tax bill could exceed $400,000 due to high marginal rates (32% and 35%). By spreading withdrawals evenly to fill the 24% bracket each year, the tax bill drops to roughly $210,000 less. The article recommends projecting future income, distributing enough to fill the 24% bracket annually, and accelerating withdrawals during low-income retirement years to minimize taxes.