Inherited IRA Calculator: How to Use It

What this calculator does

The Inherited IRA Calculator finds your deadline (December 31 of the year containing the 10th anniversary of the death) and how many calendar years you have left, counting this year. It shows a level yearly withdrawal that empties the account by the deadline at an assumed 5% growth rate, the balance left for the final year if you take only the required minimums, and a rough federal tax figure: the balance times the bracket you pick.

When the owner died on or after their required beginning date, it also shows this year's required minimum: the balance divided by the longer of your remaining life expectancy and the owner's, both from IRS Table I (Pub. 590-B, Appendix B).

What each input means

Inherited IRA balance

The inherited IRA's value on December 31 of last year. Each year's RMD is figured from the prior year-end balance, so that's the number to use for this year. Your custodian reports it on your year-end statement.

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? For an IRA, the RBD is April 1 of the year after the owner reached RMD age: 73 for anyone who reaches 72 after 2022 (75 for those born 1960 or later under SECURE 2.0), and 72 or 70 1/2 for older owners (Pub. 590-B). 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, dividing by the longer of your remaining life expectancy and the owner's, then empty whatever remains by year 10.

Your current age and tax bracket

Enter your current age. The calculator works back to your age in the year after the death, looks it up in Table I, and subtracts one for each year since. It also needs the owner's age in the year of death, because the owner's remaining life expectancy wins if it's longer. Your tax bracket only feeds the rough tax figure.

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, most of it gets taxed at your top marginal rates, and it can 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, as long as you still take any required annual minimums.

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 take distributions over 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.