Inherited IRA RMD Calculator

Frequently Asked Questions

What is the 10-year rule for inherited IRAs?

Under the SECURE Act (for deaths after 2019), most non-spouse beneficiaries must fully distribute an inherited IRA by December 31 of the 10th year after the owner's death. There is no required annual amount during those 10 years unless the owner had already begun RMDs.

Do I pay taxes on inherited IRA distributions?

Inherited traditional IRA distributions are taxable as ordinary income in the year received. Inherited Roth IRA distributions are tax-free if the account was open for at least 5 years before the original owner's death.

Can I roll an inherited IRA into my own IRA?

Only surviving spouses can roll an inherited IRA into their own IRA. All other beneficiaries must keep the account as an inherited IRA and cannot add new contributions or roll it over.

What happens if I miss an RMD from an inherited IRA?

The excise tax is 25% of the amount not distributed (down from 50% under SECURE 2.0). File Form 5329 and request a waiver. The IRS routinely waives the penalty for first-time failures with reasonable cause.

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Estimates for informational purposes only.

Important Disclaimer: Estimates for informational purposes only.

This calculator provides estimates for informational purposes only. Results are based on assumptions and may not reflect actual outcomes. Consult qualified professionals in relevant fields before making important decisions based on these results.

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How This Calculator Works

When you inherit an IRA, the rules for taking distributions depend on who you are relative to the original account owner, when they died, and the account type (traditional vs. Roth). This calculator identifies your beneficiary category - Eligible Designated Beneficiary (EDB), Non-Eligible Designated Beneficiary (NEDB), or surviving spouse - and applies the correct distribution schedule.

For EDBs using the life-expectancy method, the annual RMD is: RMD = account balance ÷ life expectancy factor, where the factor comes from IRS Publication 590-B tables. For the 10-year rule (most NEDBs), the IRS requires the account to be fully distributed by December 31 of the 10th year after the owner's death, with no specific annual minimum during that window (though the IRS has issued guidance for owners who died after their required beginning date).

SECURE Act Rule Changes

The SECURE Act of 2019 dramatically changed inherited IRA rules for most non-spouse beneficiaries. Before 2020, any beneficiary could use the "stretch IRA" - taking distributions over their own life expectancy, potentially over decades. After 2019, most non-spouse beneficiaries must empty the account within 10 years.

The SECURE 2.0 Act (2022) made additional changes but largely preserved the 10-year rule for non-spouses. Key beneficiary categories under current rules:

Surviving spouses have the most flexibility - they can roll the IRA into their own account, defer distributions, and take RMDs on their own schedule.

Minor children of the deceased use the life-expectancy method until age 21, then have 10 years to deplete the account.

Chronically ill or disabled individuals may use the life-expectancy stretch.

Individuals not more than 10 years younger than the deceased may use life expectancy.

All other non-spouses must use the 10-year rule.

Traditional vs. Roth Inherited IRA Rules

The inheritance rules work differently depending on the account type:

Inherited Traditional IRA: All distributions are taxable as ordinary income. The 10-year rule or life-expectancy schedule forces you to recognize that income over a defined period, potentially pushing you into higher brackets. Spreading distributions deliberately to keep income in lower brackets is an important planning strategy.

Inherited Roth IRA: Qualified distributions are completely tax-free (unlike contributions to your own Roth, there is no 5-year wait for an inherited Roth that was open 5+ years). However, the same 10-year rule applies - the account must be empty by year 10. Because Roth distributions are tax-free, there is less urgency to take distributions early; leaving the money to compound through year 10 then distributing in one lump sum at year 10 is often optimal if you do not need the income sooner.

Surviving Spouse Options

Surviving spouses have unique flexibility with inherited IRAs. Three main options:

Roll into own IRA: The spouse treats it as their own retirement account. RMDs do not start until their own required beginning date (age 73). This is typically the best option for spouses younger than the deceased.

Inherited IRA with life expectancy: Take distributions over the longer of the spouse's life expectancy or the deceased owner's remaining life expectancy. This allows access before 59½ without penalty, making it valuable for younger surviving spouses who need income before they can access their own retirement accounts penalty-free.

Lump sum or 5-year rule: Available but rarely optimal due to the large tax hit from immediate income recognition.

Surviving spouses can also delay the rollover decision - keeping the account as an inherited IRA initially and rolling it over later when they turn 59½ to avoid early-distribution penalties on their own withdrawals.

Tax Planning for Inherited IRA Distributions

Front-load in low-income years: If you inherit a large traditional IRA under the 10-year rule, taking larger distributions in years when your income is lower (career breaks, large deductions) can minimize bracket creep.

Coordinate with Roth conversions: If you have your own traditional IRA, large inherited IRA distributions may make Roth conversions less efficient in the same year due to stacked income.

Watch state taxes: Some states do not follow the federal inherited IRA rules for state income tax; some exempt inherited IRA income. Verify your state rules.

File Form 5329 if missed: If you missed an RMD on an inherited IRA, file Form 5329 and request a waiver of the 25% excise tax (reduced from 50% under SECURE 2.0). The IRS frequently waives the penalty for first-time misses.

Tax laws change frequently. Verify current limits at IRS.gov and consult a qualified financial advisor before making retirement decisions.

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