@shydig -- you may want to contemplate distributions LARGER than RMD so there isn't a balloon in the 10th year. That 10th year balloon could put you in a higher tax bracket, so best to try and smooth out the distributions, but it is depedent on your specific income situation.
a simple strategy suggested by others on these boards would be to distribute 1/9 of the 12/31/21 balance this year, 1/8 of the 12/31/22 balance in 2023, 1/7 of the 12.31.23 balance in 2024, etc. That way there is no balloon in year 10 and you've smoothed out the distributions over time.
However, that is just a simple approach, this can get more complicated if you are on Medicare or are going to go on Medicare during these 10 years - because there is something called "IRMAA" which adds to your medicare premium, but is really a tax in disguide, based on your AGI, which of course is now going to be higher because of the distributions from the inherited IRA. Dependent on your income you can develop strategies to minimize this phanton tax.
this is a good article that explains IRMAA
https://thefinancebuff.com/medicare-irmaa-income-brackets.html
also, the current set of tax brackets are set to revert to the 2017 tax brackets in 2026, unless Congress adjusts them. That means taxes will be higher in 2026, so another strategy is to front load the distributions during 2022-2025 to take advantage of lower tax brackets.
Depending on your income level, this gets very complicated and is not for the faint of heart!
ps RMD is an abbreviation for Required MINIMUM distribution, not Required MAXIMUM distribution 😀
