Inherited IRA RMD Calculator

How inherited IRA rules work under the SECURE Act

When someone dies owning a traditional or Roth IRA, the person or entity that inherits the account becomes the beneficiary. The SECURE Act created two broad groups of individual beneficiaries, each with different distribution options:

• Non-eligible designated beneficiaries (NEDBs): most non-spouse individuals, such as adult children, grandchildren, or other relatives who are more than 10 years younger than the original owner.
• Eligible designated beneficiaries (EDBs): groups with special rules, including surviving spouses, minor children of the deceased (until they reach majority), disabled or chronically ill beneficiaries, and individuals who are not more than 10 years younger than the original owner.

The SECURE Act also introduced the 10-year rule for many beneficiaries. If the 10-year rule applies, the inherited IRA generally must be fully distributed by December 31 of the 10th year after the year of death. In some cases, annual RMDs are also required during that 10-year window, especially when the original owner died after their required beginning date.

What this calculator does

The calculator models annual withdrawals from an inherited IRA over a 10-year period (or a life-expectancy–style schedule where applicable) based on:

• Inherited IRA balance: the starting value of the inherited account.
• Account type: traditional IRA (pre-tax) versus Roth IRA (after-tax).
• Year of original owner’s death: to align with SECURE Act timing (this tool assumes deaths in 2020 or later).
• Beneficiary type: non-eligible designated beneficiary, surviving spouse, minor child of the deceased, disabled/chronically ill, or not more than 10 years younger.
• Beneficiary age and original owner’s age at death: used to approximate life expectancy where rules allow.
• Expected annual return: a constant growth rate on the remaining account balance.
• Marginal tax rate: used to estimate the tax impact of taxable distributions.
• Withdrawal strategy: how you choose to spread withdrawals over the allowed period.

The output shows estimated yearly withdrawals, remaining balance, and approximate taxes paid over time for the strategy you select.

Key formulas and calculation approach

The calculator applies simplified math to approximate how the account and withdrawals behave over time. At a high level:

• The account grows each year by your expected annual return, applied to the prior end-of-year balance after withdrawals.
• Withdrawals are scheduled according to your chosen distribution strategy while ensuring that the account is depleted by the end of the 10-year window (when the 10-year rule applies).
• For traditional IRAs, the tax estimate is calculated as: withdrawal × marginal tax rate.

For example, with a constant annual return, the end-of-year balance in year t is approximated as:

Where:

• B_t is the balance at the end of year t.
• B_t−1 is the balance at the end of the prior year.
• W_t is the withdrawal during year t.
• r is the expected annual return (for example, 6% as 0.06).

The tool then applies your chosen withdrawal pattern (even, front-loaded, back-loaded, maximum deferral, or minimum required) to determine each W_t so that the inherited IRA is exhausted by the end of the modeled period.

Understanding the distribution strategies

Different withdrawal strategies trade off growth potential, tax timing, and cash-flow flexibility. This calculator lets you compare several common approaches:

• Even annual distributions: withdraw approximately the same amount (in real dollar terms) each year so that the account is depleted by year 10.
• Maximum deferral (all in year 10): take minimal or no withdrawals until year 10, then withdraw the remaining balance in a single large distribution.
• Front-load: take higher withdrawals in the first few years, then taper down later.
• Back-load: take smaller withdrawals early and larger withdrawals later, but not necessarily everything in the final year.
• Minimum required (if RMDs apply): approximate a life-expectancy–style required minimum each year, with flexibility to withdraw more if desired.

Comparing strategy trade-offs

Roth vs. traditional inherited IRAs

The account type you choose in the form significantly affects how you interpret results:

• Traditional inherited IRA: distributions are generally taxable as ordinary income. The calculator applies your marginal tax rate to estimate taxes owed.
• Roth inherited IRA: qualified distributions are typically tax-free, but the account usually must still be emptied within 10 years. The calculator may still show “tax impact” for illustration, but in many real Roth scenarios, actual taxes will be lower or zero.

Some beneficiaries who inherit Roth IRAs are not required to take annual RMDs during the 10-year window, but they still must ensure the balance is fully withdrawn by the end of year 10. This tool focuses on timing and growth rather than strict legal minimums for Roths.

Worked example (using the default values)

Consider these sample inputs:

• Inherited IRA balance: $500,000
• Account type: Traditional IRA
• Year of death: 2024
• Beneficiary: Non-eligible designated beneficiary, age 45
• Original owner’s age at death: 75
• Expected annual return: 6%
• Marginal tax rate: 24%
• Strategy: Even annual distributions

With these assumptions, the calculator will:

1. Project the account growing at 6% per year on the remaining balance.
2. Determine an annual withdrawal pattern that fully depletes the account by the end of year 10.
3. Apply a 24% tax rate to each year’s withdrawal to estimate taxes due.

Switching the strategy to maximum deferral would keep more money invested longer, potentially increasing the final account value before the year 10 payout—but it may also create a very large taxable distribution in that final year. Front-loading or back-loading will shift when you receive money and when you pay taxes, which may help you better match expected income, deductions, or major expenses.

Assumptions and limitations

This calculator is intentionally simplified so it can run quickly in your browser. Key assumptions include:

• SECURE Act timing only: the tool assumes the original owner died in 2020 or later, after the SECURE Act rules took effect. Pre-2020 deaths and certain grandfathered stretch IRAs are not modeled.
• Single individual beneficiary: scenarios with multiple beneficiaries, trusts as beneficiaries, or complex estate planning structures are not covered.
• Approximate life expectancy: when “minimum required” is selected, the calculator approximates life-expectancy–based RMDs and does not replicate official IRS life expectancy tables exactly.
• Flat tax rate: the model uses a single marginal tax rate for all years and ignores detailed brackets, deductions, credits, and state/local differences.
• Constant investment return: it assumes the account earns the same percentage return every year, with no market volatility or different asset allocations.
• Roth specifics simplified: for Roth inherited IRAs, the tool focuses on timing and balance changes; actual tax treatment in qualified Roth scenarios is often more favorable than shown.

IRS guidance on inherited IRAs and the 10-year rule continues to evolve, especially around whether annual RMDs are required in some situations (for example, when the original owner died after their required beginning date). This calculator cannot capture every nuance, and its outputs should not be treated as legal or tax advice.

Always confirm your required distribution schedule and tax treatment with a qualified tax professional or financial advisor, especially if you are a disabled or chronically ill beneficiary, a minor child, a surviving spouse with several options, or if any part of your situation is unusual.

Understanding Inherited IRA Rules: A Complete Guide

Inheriting an IRA brings both an opportunity and significant tax planning responsibilities. The SECURE Act of 2019 dramatically changed the rules for inherited IRAs, eliminating the "stretch IRA" for most beneficiaries. This guide explains the current rules, who they apply to, and how to optimize your inherited IRA distributions.

The SECURE Act 10-Year Rule

For most non-spouse beneficiaries who inherit IRAs from owners who died after December 31, 2019, the entire account must be distributed within 10 years of the owner's death:

For example, if the original owner died in 2024, the account must be fully distributed by December 31, 2034.

Who Is Subject to the 10-Year Rule?

Non-Eligible Designated Beneficiaries must follow the 10-year rule. This includes:

• Adult children of the deceased
• Grandchildren
• Siblings
• Friends
• Most trusts

Eligible Designated Beneficiaries (EDBs)

Five categories of beneficiaries can still use the stretch IRA over their life expectancy:

The Annual RMD Controversy

A major confusion arose after the SECURE Act: Must non-EDBs take annual RMDs during the 10 years, or can they wait until year 10?

Current IRS Guidance (2024):

• If the original owner died before their Required Beginning Date (RBD, currently age 73): No annual RMDs required—just empty by year 10
• If the original owner died on or after their RBD: Annual RMDs required based on beneficiary's life expectancy, plus must empty by year 10

Note: The IRS has waived penalties for missed 2021-2024 RMDs while rules are clarified. Stay updated on final regulations.

Life Expectancy Calculation for RMDs

When annual RMDs apply, they're calculated using the IRS Single Life Expectancy Table:

The life expectancy factor is determined in year 1 and reduced by 1 each subsequent year.

Sample Life Expectancy Factors

Distribution Strategy Comparison

How you spread distributions over 10 years significantly impacts your total tax bill:

Strategy 1: Even Distributions

Withdraw roughly equal amounts each year. Benefits:

• Predictable income and tax planning
• Avoids large bracket jumps
• Balanced approach

Strategy 2: Maximum Deferral

Take nothing until year 10, then withdraw entire balance. Benefits:

• Maximum tax-deferred growth
• Works well for Roth inherited IRAs (no RMDs, tax-free)

Risks:

• Huge tax hit in year 10
• May push you into much higher brackets
• Doesn't work if annual RMDs required

Strategy 3: Front-Load

Take larger distributions early. Benefits:

• If expecting higher income later (promotions, business growth)
• Locking in current tax rates if expecting increases
• Reduces future RMD requirements

Strategy 4: Back-Load

Take minimum early, larger amounts later. Benefits:

• More tax-deferred growth
• If expecting lower income later (retirement)
• Useful if current income is high

Tax Bracket Management

The optimal strategy often involves "filling brackets" each year:

Special Rules for Inherited Roth IRAs

Roth inherited IRAs have unique advantages:

• No RMDs during 10 years: You can let it grow tax-free
• Tax-free distributions: All withdrawals are tax-free (assuming 5-year rule is met)
• Still must empty in 10 years: The 10-year rule applies regardless

Optimal Roth Strategy: Defer all withdrawals to year 10 for maximum tax-free growth, unless you need the funds.

Successor Beneficiary Rules

If a beneficiary dies before emptying an inherited IRA, the successor beneficiary's rules depend on timing:

• Successor inherits the remaining 10-year window of the original beneficiary
• Does NOT get a fresh 10 years
• May need to accelerate distributions

Trust Beneficiaries

When a trust is named as beneficiary, the rules get complex:

See-Through Trusts

If certain requirements are met, the trust can "look through" to the individual beneficiaries:

• Trust must be valid under state law
• Trust must be irrevocable or become so at death
• Beneficiaries must be identifiable
• Trust documentation provided to custodian

Conduit vs. Accumulation Trusts

• Conduit: Must distribute RMDs directly to beneficiaries annually
• Accumulation: Can retain distributions; highest marginal rates apply

State Tax Considerations

Some states offer favorable treatment for retirement distributions:

• No state income tax: AK, FL, NV, SD, TN, TX, WA, WY
• Retirement income exclusions: Many states exclude some IRA distributions
• Consider timing: Take distributions when living in lower-tax state

Impact on Other Financial Situations

Medicare Premiums (IRMAA)

Large distributions can trigger Income-Related Monthly Adjustment Amounts, increasing Medicare Part B and D premiums.

Social Security Taxation

Inherited IRA distributions can cause more of your Social Security benefits to become taxable.

ACA Subsidies

If on marketplace insurance, distributions increase MAGI and can reduce or eliminate premium subsidies.

Worked Example

Situation: Sarah, age 50, inherits a $400,000 Traditional IRA from her father who died in 2024 at age 78 (after his RBD).

Rules that apply:

• 10-year rule (non-EDB adult child)
• Annual RMDs required (father died after RBD)
• Must empty by December 31, 2034

Year 1 RMD calculation:

• Sarah's age in year after death: 51
• Life expectancy factor: 35.2
• RMD: $400,000 ÷ 35.2 = $11,364 minimum

Sarah could take more than the RMD and might choose to take $45,000/year to stay in the 22% bracket and empty the account over ~10 years with growth.

Commonly Asked Questions

Can I roll an inherited IRA into my own IRA?

Only surviving spouses can do this. All other beneficiaries must keep it as an inherited IRA in the deceased's name "for the benefit of" the beneficiary.

What if I miss an RMD?

The penalty is 25% of the amount not taken (reduced from 50% by SECURE 2.0). File Form 5329 and request a waiver for reasonable cause.

Can I do a Roth conversion on an inherited IRA?

No. Only the original owner could do Roth conversions. Beneficiaries cannot convert inherited Traditional IRAs to Roth.

What happens if I don't empty the account in 10 years?

The remaining balance is subject to the 25% excess accumulation penalty.

Do qualified charitable distributions (QCDs) work for inherited IRAs?

Yes, if you're 70½ or older, you can do QCDs from an inherited IRA (up to $105,000 in 2024).

Planning Strategies

1. Calculate your bracket space each year and fill it strategically
2. Consider future income changes when planning distributions
3. Bunch deductions in years with higher distributions
4. Use QCDs if charitably inclined and age-eligible
5. Coordinate with other income like Social Security, pensions, Roth conversions
6. Model scenarios with different distribution patterns

Key Takeaways

• Most non-spouse beneficiaries must empty inherited IRAs within 10 years
• Annual RMDs may or may not be required depending on when the owner died
• Distribution strategy significantly impacts total taxes paid
• Inherited Roth IRAs are most valuable—let them grow tax-free
• Consider bracket management, not just minimizing withdrawals
• Plan ahead—the 10 years go faster than expected

The inherited IRA rules are complex and have been evolving. This calculator provides a starting point for planning, but consult a tax professional for personalized advice on your specific situation.