Inherited IRA RMD Calculator

You inherited an IRA. Now what?

Inheriting an IRA can feel like a windfall, but the rules that govern it changed dramatically with the SECURE Act of 2019 and got clarified again with IRS final regulations in 2024. What you do in the first few years can save (or cost) you tens of thousands of dollars in taxes.

The 10-year rule in one sentence

If you inherited a traditional or Roth IRA from someone who died in 2020 or later, and you are not on the exempt list, the entire account must be emptied by December 31 of the 10th year after the owner's death. That is the default rule for most adult children, siblings, and friends who inherit an IRA.

Who is exempt (eligible designated beneficiaries)

Some beneficiaries can still stretch distributions over their own life expectancy, which used to be everyone's default. They include a surviving spouse, a minor child of the original owner (until they reach the age of majority), a disabled or chronically ill beneficiary, and any beneficiary who is not more than 10 years younger than the deceased. If you are in one of these groups, you take smaller annual RMDs based on the IRS Single Life Expectancy Table and generally pay less in taxes each year.

The annual RMD wrinkle

Under IRS final regulations, whether you owe annual RMDs during the 10-year window depends on when the original owner died. If they had already reached their required beginning date (age 73 for most current retirees), you owe an annual RMD each year in years 1 through 9, and then must clean out the balance in year 10. If they died before their RBD, you can time withdrawals however you want within the 10-year window as long as it is empty by the end.

Why it matters for taxes

Traditional IRA withdrawals are taxed as ordinary income. Cramming 10 years of an inherited IRA into one lump-sum withdrawal in year 10 can push you into the top tax bracket. Spreading withdrawals evenly, or timing them to lower income years such as early retirement or a sabbatical, often keeps more money in your pocket.

Inherited Roth IRAs

Roth IRAs also fall under the 10-year rule, but withdrawals are generally tax free (assuming the account has met the 5-year holding period). Many beneficiaries let the balance grow tax free until year 10, then withdraw it all at once, since there is no tax cost to waiting.

Rules here are complex and depend on your exact facts. Coordinate with your IRA custodian and a qualified tax professional before locking in a strategy.