Inherited IRA Distribution Calculator

What This Calculator Does and Why It Matters

When you inherit an IRA, the rules for taking money out are very different from a regular retirement account. You cannot leave the money untouched forever. The IRS requires you to withdraw funds on a schedule based on your relationship to the original owner.

This free inherited IRA distribution calculator helps you figure out your required minimum distribution (RMD), which withdrawal rule applies to you, and how much might remain in the account over time. Getting this right matters because missing an RMD can trigger a 25% excise tax penalty on the amount you failed to withdraw.

Whether you inherited from a spouse, parent, or anyone else, this tool gives you a fast, clear starting estimate before you speak with a financial advisor.

How to Use This Calculator

Step-by-Step Instructions

1. Select your relationship to the original IRA owner from the dropdown — this determines whether you qualify for the stretch IRA or must follow the 10-year rule.
2. Enter the IRA account balance as of December 31 of the prior year, which is the figure the IRS uses for RMD calculations.
3. Enter your current age so the calculator can look up the correct IRS life expectancy factor from the Single Life Expectancy Table.
4. Enter the year you inherited the IRA — this sets the deadline for your distribution period.
5. Enter an expected annual growth rate for the account, such as 5% or 6%, to see a projected balance estimate.
6. Click Calculate Distribution to see your first-year RMD, remaining balance, applicable rule, and estimated end-of-period balance.
7. Use the Reset button to clear all fields and start over with different values.

The Formula Explained

The IRS does not use a single universal formula for inherited IRAs. Instead, the calculation method depends on which distribution rule applies to your situation. Understanding this is key to staying compliant.

Breaking Down the Formula

For beneficiaries who qualify for the life expectancy method (eligible designated beneficiaries), the RMD formula is simple: divide the prior year-end account balance by your life expectancy factor from the IRS Single Life Expectancy Table. The factor is based on your age in the year after the original owner's death.

For most other beneficiaries — including adult children, friends, and siblings — the SECURE Act of 2019 introduced the 10-year rule. You must withdraw the entire balance by the end of the tenth year following the owner's death. You can take more or less in any given year, but the full account must be emptied. You can read more about the SECURE Act rules on IRS.gov's beneficiary RMD page.

Example Calculation with Real Numbers

Say you are 45 years old and inherited a $250,000 IRA from a non-spouse in 2024. You fall under the 10-year rule. Your first-year estimated distribution is $250,000 divided by 10, which equals $25,000. After taking that distribution, your remaining balance is $225,000, which continues to grow until your next withdrawal.

If you had inherited from a spouse and elected to use the life expectancy method at age 45, your IRS factor would be approximately 41.8. Your RMD would be $250,000 divided by 41.8, which equals roughly $5,981 — much smaller than the 10-year rule amount.

When Would You Use This

This calculator is most useful any time you need to plan withdrawals from an account you did not personally fund. Knowing what you owe each year helps you budget and avoid penalties.

Real Life Use Cases

Inherited IRAs come up in a wide range of situations. The most common involve losing a parent or spouse who saved carefully for retirement. But they also occur when a sibling, uncle, or close friend names you as a beneficiary.

Specific example scenario

Imagine your mother passed away in 2023 and left you a $180,000 traditional IRA. You are 38 years old and not her spouse. Under the 10-year rule, you must empty the account by December 31, 2033. You can withdraw nothing in years one through nine and take the full remaining balance in year ten — but the taxes on a large lump sum may be painful. Using this calculator helps you plan a more spread-out withdrawal strategy to manage your tax bracket each year.

If you are also managing student loan repayments or other financial obligations, tools like the income-driven repayment IDR plan calculator can help you see how new taxable income from IRA distributions affects your payment obligations.

Tips for Getting Accurate Results

Use the Correct Year-End Balance

Always use the December 31 balance from the prior year — not the current account value. The IRS requires this specific figure for RMD calculations, and using today's balance will give you a different number than what you legally owe.

Know Your Beneficiary Classification

Your relationship to the deceased owner determines everything. Spouses have the most flexibility, including the option to roll the inherited IRA into their own account. Minor children, disabled individuals, and those within 10 years of the owner's age also qualify for the stretch IRA. All other beneficiaries must follow the 10-year rule. Misclassifying yourself is one of the most common mistakes. You can review the official classifications in detail on Investopedia's inherited IRA guide.

Factor In the Tax Hit

Every distribution from a traditional inherited IRA is taxed as ordinary income in the year you take it. Large distributions can push you into a higher tax bracket. Consider spreading withdrawals across multiple years to keep your tax liability manageable. If the account was a Roth IRA, distributions are generally tax-free as long as the account was open for at least five years. For retirement planning tools that help you think through tax-efficient withdrawal strategies, check out the Roth IRA conversion tax calculator or the required minimum distribution calculator for 2026.

Frequently Asked Questions

What is an inherited IRA?

An inherited IRA is a retirement account you receive after the original owner passes away. It can come from a traditional IRA, Roth IRA, SEP IRA, or SIMPLE IRA. The funds remain tax-advantaged, but new rules govern when and how you must take withdrawals.

Who must follow the 10-year rule?

Most non-spouse beneficiaries who inherited an IRA after January 1, 2020 must follow the 10-year rule. This includes adult children, siblings, nieces, nephews, friends, and trusts. The entire account must be emptied by the end of the tenth calendar year after the owner's death.

Can a spouse roll an inherited IRA into their own account?

Yes. Spouses are the only beneficiaries who can roll an inherited IRA directly into their own IRA. This lets them delay RMDs until they reach age 73 and use their own life expectancy table, which is more favorable. It is usually the best option unless the surviving spouse is younger than 59½ and needs immediate access to funds without the early withdrawal penalty.

What happens if I miss an RMD?

If you miss a required minimum distribution, the IRS imposes an excise tax of 25% on the amount that should have been withdrawn. This was reduced from 50% under the SECURE Act 2.0. If you correct the mistake promptly, the penalty may be reduced to 10%. It is important to stay on schedule each year.

Is a Roth inherited IRA taxable?

Qualified distributions from an inherited Roth IRA are generally tax-free. However, the same distribution rules still apply — you must empty the account within the applicable time frame (typically 10 years for non-spouse beneficiaries). The advantage is that you pay no income tax on those withdrawals, unlike a traditional inherited IRA.

Does the 10-year rule require annual distributions?

Before IRS guidance issued in 2022 and 2023, many assumed no annual distributions were required under the 10-year rule. The IRS then clarified that if the original owner had already begun taking RMDs, the beneficiary must also take annual RMDs in years one through nine and empty the account by year ten. If the owner had not yet started RMDs, no annual distributions are required — just the full withdrawal by the deadline.

What is the stretch IRA and who qualifies?

The stretch IRA is a strategy that allows eligible designated beneficiaries to take distributions over their own life expectancy rather than a fixed 10-year window. Eligible beneficiaries include the surviving spouse, a minor child of the deceased (until age 21), a disabled or chronically ill individual, and anyone not more than 10 years younger than the original owner. This approach stretches out the tax-deferred growth over many more years.

What IRS table does this calculator use?

This calculator uses the IRS Single Life Expectancy Table (Table I), which applies specifically to inherited IRA beneficiaries taking distributions based on their own life expectancy. This is different from the Uniform Lifetime Table, which applies to account owners taking their own RMDs. The factors in this table were updated in 2022 to reflect longer life expectancies.

Conclusion

Inheriting an IRA is both a financial opportunity and a responsibility. The distribution rules are strict, and missing a deadline or using the wrong formula can result in costly penalties. This calculator gives you a clear picture of your first-year RMD, the rule that applies to your situation, and a projection of how the account might grow or shrink over time.

Use it as a planning starting point, and always confirm your specific situation with a qualified tax advisor or financial planner before making withdrawals.