How is this calculated?

This calculator uses compound interest formulas, historical market return assumptions, and standard financial planning methodologies to project your investment growth over time.

What rate of return should I assume?

A balanced portfolio has historically returned 7-10% annually before inflation (about 5-7% after). Conservative estimates use 6-7%, aggressive portfolios may assume 8-10%. Lower is safer for planning.

Should I invest or pay off debt first?

Pay off high-interest debt (above 7%) first. For lower-rate debt like mortgages, investing often makes more sense mathematically, but being debt-free has psychological benefits too.

Inherited IRA RMD Calculator

Calculate Required Minimum Distributions for an inherited IRA under the SECURE Act 10-year rule. Plan withdrawals to minimize tax impact.

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Built by Abiot Y. Derbie, PhD — Postdoctoral Research Fellow. Quantitative researcher specializing in statistical modeling and data-driven decision systems.

Mathematical models independently verified by Eskezeia Y. Dessie, PhD (Indiana University School of Medicine) and Armin Allahverdy, PhD (LinkedIn) — Data Scientist, Machine Learning & Data Mining.

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Inherited IRA Balance

Your Current Age

Beneficiary Type

Year Inherited

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This calculator is for informational and educational purposes only. Results are estimates based on the information you provide and standard financial formulas. This is not financial advice. Consult a qualified financial advisor for decisions specific to your situation. Full Disclaimer

Things to Know

Essential concepts for understanding your results

10-Year Rule

What is the inherited IRA 10-year rule?

Under the SECURE Act, most non-spouse beneficiaries must fully distribute inherited IRAs within 10 years of the original owner's death. No annual RMDs are required (distribute any amount, any time) but the entire balance must be withdrawn by December 31 of the 10th year. A $500,000 inherited IRA distributed equally over 10 years adds $50,000/year to your taxable income — potentially pushing you into higher brackets. Strategic distribution timing is essential.

Exceptions

Who is exempt from the 10-year rule?

Eligible designated beneficiaries can still stretch distributions over their lifetime: surviving spouses, minor children of the deceased (until age 21, then 10-year clock starts), disabled or chronically ill individuals, and beneficiaries not more than 10 years younger than the deceased. Surviving spouses have the most flexibility — they can roll the inherited IRA into their own IRA, eliminating RMDs until age 73 and allowing continued tax-deferred growth.

Tax Strategy

How do you minimize taxes on an inherited IRA?

Distribute more in low-income years and less in high-income years. If you expect a sabbatical, job change, or early retirement during the 10-year window, accelerate distributions during those low-bracket years. Consider Roth conversions: you cannot convert an inherited IRA to Roth, but you can fill your current low brackets with inherited IRA distributions and simultaneously contribute to your own Roth IRA. Spreading distributions to avoid bracket jumps can save $10,000-50,000 in taxes on a large inherited IRA.

Inherited IRA RMD Calculator: Know Your Required Distributions

An inherited IRA calculator determines the required minimum distributions you must take from an inherited retirement account. The rules changed dramatically with the SECURE Act (2020) and SECURE 2.0 (2023) — eliminating the "stretch IRA" for most non-spouse beneficiaries and replacing it with a 10-year distribution requirement.

Enter the original owner's death date, your relationship to the deceased, the account balance, and your age. The calculator shows your distribution schedule, annual amounts, and tax impact under current rules.

Inherited IRA Rules by Beneficiary Type

Beneficiary	Distribution Rule	Key Details
Surviving spouse	Treat as own OR 10-year rule	Can roll into own IRA; RMDs based on own age
Minor child (of deceased)	Stretch until majority, then 10-year	Stretch ends at 21; 10-year clock starts then
Disabled/chronically ill	Stretch (life expectancy)	Annual RMDs using Single Life Table
Person ≤10 years younger than deceased	Stretch (life expectancy)	Siblings close in age qualify
All other individuals	10-year rule	Must empty account by Dec 31 of year 10
Non-designated (estate, charity)	5-year rule	Must empty by Dec 31 of year 5

The 10-year rule (most common): Adult children, grandchildren, siblings, friends, and any non-EDB (Eligible Designated Beneficiary) must withdraw the entire inherited IRA by December 31 of the 10th year after the owner's death. The IRS clarified in 2024 that annual RMDs are also required during years 1-9 if the original owner had already begun RMDs (was 73+). This prevents beneficiaries from deferring all distributions to year 10.

Tax planning implication: On a $500,000 inherited IRA, a child in the 24% bracket faces $120,000 in federal taxes over 10 years. Strategic annual withdrawals — filling lower brackets in low-income years and minimizing in high-income years — can reduce total tax by $15,000-$30,000 compared to waiting until year 10. Consult a tax advisor for optimal distribution scheduling.

Frequently Asked Questions

What is the 10-year rule for inherited IRAs?

Most non-spouse beneficiaries must withdraw the entire inherited IRA by December 31 of the 10th year after the owner's death. You can take distributions in any pattern (nothing for 9 years then all in year 10, or equal annual amounts, or any combination). If the original owner was 73+ and taking RMDs, you must also take annual minimum distributions during years 1-9. All distributions are taxed as ordinary income.

Can I roll an inherited IRA into my own IRA?

Only surviving spouses can do this. A spouse can: (1) roll the inherited IRA into their own IRA (no RMDs until their own RMD age), (2) remain as beneficiary (RMDs based on single life expectancy), or (3) disclaim the inheritance. Non-spouse beneficiaries cannot roll an inherited IRA into their own accounts — they must follow the 10-year rule or applicable stretch provisions.

Are inherited Roth IRAs taxable?

Distributions from an inherited Roth IRA are tax-free (assuming the 5-year holding period was met by the original owner). However, the 10-year distribution rule still applies to non-spouse beneficiaries — you must empty the account by year 10. Since Roth distributions are tax-free, the optimal strategy is to wait until year 10 to withdraw, maximizing 10 years of additional tax-free growth.

What is the penalty for not taking inherited IRA distributions?

25% excise tax on the amount that should have been distributed (SECURE 2.0, reduced from 50%). If corrected within 2 years: reduced to 10%. If you fail to empty the account by the end of year 10: 25% penalty on the remaining balance. Set calendar reminders for required distributions and consult a tax advisor for the optimal distribution schedule to minimize both taxes and penalties.

Does the SECURE Act affect all inherited IRAs?

The 10-year rule applies to IRAs inherited after December 31, 2019. IRAs inherited before 2020 are grandfathered under the old "stretch" rules (life expectancy distributions). If you inherited an IRA in 2018, you continue using the stretch method. If you inherited in 2021 or later, the 10-year rule applies unless you qualify as an Eligible Designated Beneficiary (spouse, minor child, disabled, chronically ill, or person within 10 years of age).

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