Inherited IRA RMD Calculator
Use this calculator to estimate your Required Minimum Distribution (RMD) from an inherited IRA based on your beneficiary type and the year of the original owner's death.
Spouse
Eligible Non-Spouse (e.g., minor child, disabled, chronically ill, not more than 10 years younger)
Non-Eligible Non-Spouse (e.g., adult child, sibling, friend)
Your Estimated RMD:
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When you inherit an Individual Retirement Account (IRA), you become subject to specific rules regarding how and when you must withdraw money from it. These withdrawals are known as Required Minimum Distributions (RMDs), and failing to take them can result in significant penalties from the IRS.
What is an Inherited IRA?
An inherited IRA is an IRA that has been passed down to a beneficiary after the original owner's death. The rules for inherited IRAs differ significantly from those for your own retirement accounts, especially concerning RMDs.
The Impact of the SECURE Act
The Setting Every Community Up for Retirement Enhancement (SECURE) Act, which became effective on January 1, 2020, dramatically changed the RMD rules for most non-spouse beneficiaries. For deaths occurring in 2020 or later, the traditional "stretch" IRA, which allowed beneficiaries to stretch distributions over their own lifetime, was largely eliminated for many.
Key Factors Determining Your Inherited IRA RMD
The calculation of your RMD depends on several critical factors:
- Your Relationship to the Deceased: Spouses, eligible non-spouse beneficiaries, and non-eligible non-spouse beneficiaries have different rules.
- Date of Death: Whether the original owner died before or after January 1, 2020 (the effective date of the SECURE Act).
- Original Owner's RMD Status: For certain beneficiaries under the 10-year rule, whether the original owner had already started taking their own RMDs at the time of death.
- Your Age: Used to determine the life expectancy factor for "stretch" method calculations.
- Previous Year-End Account Balance: The value of the inherited IRA on December 31st of the year prior to the RMD year.
Beneficiary Types and Their RMD Rules
1. Spouse Beneficiary
Spouses have the most flexibility. They generally have three main options:
- Roll Over to Own IRA: The spouse can roll over the inherited IRA into their own IRA. This is often the most advantageous option as it defers RMDs until the spouse reaches their own RMD age (currently 73).
- Treat as Own IRA: If the spouse is the sole beneficiary, they can elect to treat the inherited IRA as their own. Similar to a rollover, this defers RMDs.
- Treat as Inherited IRA: The spouse can keep the account as an inherited IRA. In this case, RMDs are generally calculated using the spouse's own life expectancy, and they can delay taking RMDs until the year the deceased would have turned 73 (if the deceased was younger). Our calculator assumes this option for simplicity.
2. Eligible Non-Spouse Beneficiary
These beneficiaries are exempt from the 10-year rule and can still use the "stretch" method, taking RMDs over their own life expectancy. Eligible non-spouse beneficiaries include:
- The deceased's minor child (until they reach the age of majority, typically 21 or 26, after which the 10-year rule applies).
- A disabled individual.
- A chronically ill individual.
- An individual who is not more than 10 years younger than the deceased.
For these beneficiaries, the RMD is calculated by dividing the previous year-end account balance by the beneficiary's life expectancy factor from the IRS Single Life Expectancy Table.
3. Non-Eligible Non-Spouse Beneficiary (The 10-Year Rule)
This category includes most adult children, siblings, friends, or other non-eligible individuals. For deaths occurring in 2020 or later, these beneficiaries are subject to the 10-year rule.
- If the original owner died *before* their RMDs began (before age 73): No annual RMDs are required for the first nine years. However, the entire inherited IRA balance must be distributed by December 31st of the tenth year following the original owner's death.
- If the original owner died *on or after* their RMDs began (at or after age 73): This is where it gets complex. Recent IRS guidance (Notice 2022-53 and Notice 2023-54) clarifies that annual RMDs *are* required in years 1-9 based on the beneficiary's life expectancy, and the remaining balance must still be distributed by the end of the tenth year. Our calculator incorporates this interpretation.
For deaths prior to 2020, non-eligible non-spouse beneficiaries could generally use the "stretch" method based on their own life expectancy.
How the Calculator Works
Our Inherited IRA RMD Calculator simplifies these complex rules:
- Previous Year-End Inherited IRA Balance: The starting point for your calculation.
- Beneficiary's Current Age: Used to find the appropriate life expectancy factor.
- Year of Original Owner's Death: Determines if the SECURE Act rules apply.
- Year for RMD Calculation: The specific year for which you want to calculate the RMD.
- Beneficiary Relationship to Deceased: Crucial for applying the correct set of rules.
- Was the original owner taking RMDs at the time of death?: This checkbox helps determine the specific application of the 10-year rule for non-eligible non-spouse beneficiaries.
Examples:
Let's look at a few scenarios:
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Scenario: Eligible Non-Spouse Beneficiary (Stretch IRA)
- Previous Year-End Inherited IRA Balance: $150,000
- Beneficiary's Current Age: 30
- Year of Original Owner's Death: 2021
- Year for RMD Calculation: 2024
- Beneficiary Relationship: Eligible Non-Spouse
- Original Owner Taking RMDs: N/A (not applicable for eligible non-spouse)
- Result: RMD calculated using beneficiary's life expectancy factor (55.7 for age 30). RMD = $150,000 / 55.7 = $2,692.99.
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Scenario: Non-Eligible Non-Spouse Beneficiary (10-Year Rule, Deceased NOT taking RMDs)
- Previous Year-End Inherited IRA Balance: $200,000
- Beneficiary's Current Age: 40
- Year of Original Owner's Death: 2022
- Year for RMD Calculation: 2024 (Year 2 of 10-year period)
- Beneficiary Relationship: Non-Eligible Non-Spouse
- Original Owner Taking RMDs: No
- Result: No RMD required this year. The entire balance must be distributed by the end of 2032.
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Scenario: Non-Eligible Non-Spouse Beneficiary (10-Year Rule, Deceased WAS taking RMDs)
- Previous Year-End Inherited IRA Balance: $180,000
- Beneficiary's Current Age: 50 (in 2024)
- Year of Original Owner's Death: 2021
- Year for RMD Calculation: 2024 (Year 3 of 10-year period)
- Beneficiary Relationship: Non-Eligible Non-Spouse
- Original Owner Taking RMDs: Yes
- Result: RMD calculated using beneficiary's life expectancy factor, adjusted for years passed. Beneficiary's age in 2022 (first RMD year) was 48. Initial factor for age 48 is 38.2. For 2024 (2 years after first RMD year), the divisor is 38.2 – 2 = 36.2. RMD = $180,000 / 36.2 = $4,972.38. The entire balance must be distributed by the end of 2031.
Important Disclaimer:
The rules for inherited IRAs are complex and can have significant tax implications. This calculator provides estimates based on general IRS guidelines and recent interpretations. It is not a substitute for professional financial or tax advice. Always consult with a qualified financial advisor or tax professional to understand your specific situation and ensure compliance with all applicable regulations.