Inherited IRA Calculator: How to Use It

What this calculator does

The Inherited IRA Calculator models annual withdrawal amounts across the 10-year window, projects the account balance at each year-end based on assumed growth, and shows the estimated taxable income added to your return each year for different withdrawal strategies. You can compare equal annual withdrawals, front-loaded withdrawals, back-loaded withdrawals, and the year-10 lump sum.

The calculator also flags if annual RMDs apply within the 10-year period (when the original owner had already started required minimum distributions before death) and what the minimum withdrawal amounts are in those cases.

What each input means

Inherited IRA balance

The fair market value of the inherited IRA as of December 31 of the year the original owner died. This is the starting balance for the 10-year period. Your custodian (Fidelity, Vanguard, Schwab) should provide this figure. For year 1, the applicable balance is the December 31 value from the year of death, not the value at the time you inherited.

Year of original owner's death

The 10-year clock starts the year after the owner dies. If they died in 2024, the 10-year window runs through December 31, 2034. The year of death itself doesn't count as one of the 10 years. You don't need to take a distribution in year 1 (the year after death) unless annual RMDs apply.

Whether the owner had started RMDs

Did the original owner die before or after their Required Beginning Date? The RBD is April 1 of the year after they turned 73 (or 75 if born 1960 or later). If they died before the RBD, you only need to empty the account by year 10 with no annual minimums. If they died on or after the RBD, you must take annual RMDs in years 1-9 using your own life expectancy, then empty whatever remains by year 10.

Your current age and tax bracket

The calculator uses your age to apply the correct life expectancy factor for any annual RMD calculations. Your tax bracket helps model the after-tax cost of different withdrawal schedules. Higher brackets make front-loading withdrawals less attractive; lower brackets in early years favor taking more now.

The year-10 problem

Many beneficiaries make the mistake of waiting and taking the entire balance in year 10. If the inherited IRA is worth $400,000 in year 10, that $400,000 lands entirely in your taxable income for that year. Combined with any other income, it can push you into the 37% bracket and trigger IRMAA surcharges on Medicare premiums. Spreading withdrawals over 10 years typically produces a much lower cumulative tax bill.

The exception: if you expect much lower income in later years (retirement, for example), back-loading the distributions into those lower-income years can make sense. The calculator lets you model this explicitly.

Eligible designated beneficiaries

Surviving spouses, minor children of the deceased, disabled individuals, chronically ill individuals, and beneficiaries not more than 10 years younger than the deceased all qualify as eligible designated beneficiaries. EDBs can still use the old stretch rules based on their own life expectancy. Surviving spouses have the most options: they can roll the inherited IRA into their own IRA and treat it as their own, effectively resetting all the rules.