When you inherit an IRA (Individual Retirement Account), understanding and calculating your Required Minimum Distributions (RMDs) can be overwhelming—especially with evolving IRS regulations. Fortunately, our Inherited IRA RMD Calculator is designed to simplify the process for beneficiaries by offering a fast, accurate way to determine how much you must withdraw each year.
Whether you’re a designated beneficiary or a financial advisor helping clients navigate IRA distribution rules, this tool can save you time and reduce costly mistakes.
Inherited IRA RMD Calculator
What Is an Inherited IRA RMD?
An Inherited IRA RMD is the minimum amount a beneficiary must withdraw from an inherited Individual Retirement Account each year, starting at a certain point depending on their status and the original account owner's date of death. Failing to withdraw the required amount can result in a hefty IRS penalty—up to 25% of the amount not withdrawn.
The calculation is based on:
- The IRA’s year-end balance
- The IRS distribution factor, which depends on your relationship to the deceased and your age
How to Use the Inherited IRA RMD Calculator
Using our tool is as straightforward as it gets. Here's a step-by-step guide:
1. Enter the IRA Balance
In the first field labeled "IRA Balance at Year End," input the total value of the IRA as of December 31st of the previous year.
💡 Example: $150,000
2. Enter the Distribution Factor
This value comes from the IRS Single Life Expectancy Table or other applicable IRS tables.
💡 Example: If you're 45 years old, the factor might be 38.8.
3. Click “Calculate”
Hit the “Calculate” button. The tool will divide the IRA balance by the distribution factor and immediately display your Required Minimum Distribution.
4. Reset (Optional)
If you want to start over or run a new calculation, just click the “Reset” button to clear all values.
Practical Example
Let’s walk through a common scenario.
Scenario:
Jane, age 40, inherits an IRA from her father. The account balance on December 31 of the previous year was $250,000. Based on the IRS Single Life Table, her distribution factor is 43.6.
Using the calculator:
- Enter 250000 as the IRA balance
- Enter 43.6 as the distribution factor
- Click “Calculate”
Result:
Your RMD is $5,733.94 for the year.
This is the minimum amount Jane must withdraw to avoid IRS penalties.
Why Accurate RMD Calculation Matters
- Avoid Penalties: The IRS can penalize you up to 25% of the RMD you fail to take.
- Tax Planning: Withdrawals are typically taxed as income—knowing your RMD helps in tax planning.
- Inheritance Rules Compliance: Especially post-SECURE Act, rules differ for eligible vs. non-eligible designated beneficiaries.
Use Cases for This Calculator
- Individuals who recently inherited an IRA
- Financial advisors working with clients on retirement planning
- Estate planners ensuring compliance with post-death distribution rules
- Anyone comparing different withdrawal strategies
Important Notes
- The calculator does not automatically pull IRS tables—you must know or look up the correct distribution factor based on your age and status.
- It applies to Inherited Traditional IRAs. Roth IRAs have different rules but may also require RMDs if inherited.
- Make sure to review the 10-Year Rule, Eligible Designated Beneficiary status, and SECURE Act implications when determining your distribution obligations.
FAQs About Inherited IRA RMDs
1. What is an RMD?
An RMD is the minimum amount that must be withdrawn annually from certain retirement accounts, including inherited IRAs.
2. Who must take an RMD from an inherited IRA?
Beneficiaries—including spouses, children, and other individuals—may be required to take RMDs, depending on IRS rules.
3. What is a distribution factor?
It’s a number from an IRS table used to calculate your RMD. It represents life expectancy in years.
4. Where can I find the IRS distribution factor?
Refer to the IRS Single Life Expectancy Table or Uniform Lifetime Table, depending on your status.
5. What happens if I don’t take my RMD?
You may face a 25% penalty on the amount you failed to withdraw.
6. Can I withdraw more than the RMD?
Yes, but the IRS only requires the minimum. Additional withdrawals may increase your taxable income.
7. How is the IRA balance determined?
Use the account balance as of December 31st of the previous year.
8. Does this apply to Roth IRAs?
Only if they are inherited. Original owners of Roth IRAs are not required to take RMDs.
9. Can I use this calculator for multiple IRAs?
Yes, but calculate each IRA separately unless they are the same type and eligible to be aggregated.
10. What if I’m an eligible designated beneficiary?
You may be allowed to stretch distributions over your lifetime instead of the 10-year rule.
11. What is the 10-Year Rule?
Non-eligible beneficiaries must withdraw the entire IRA within 10 years after the original owner's death.
12. When do RMDs start for inherited IRAs?
Typically by December 31st of the year following the IRA owner’s death.
13. Can I delay my first RMD?
Not usually for inherited IRAs. Traditional IRAs owned by the original individual may offer deferral until age 73.
14. Is the distribution taxed?
Yes, RMDs are taxed as ordinary income, unless it's from a Roth IRA that meets holding requirements.
15. What if the deceased was already taking RMDs?
You must continue the RMD for the year of death, and then follow inherited IRA rules thereafter.
16. Do I need to report RMDs to the IRS?
Yes. You'll receive a Form 1099-R showing your distribution, which must be included in your tax return.
17. Can I reinvest my RMD into another IRA?
No. Once distributed, RMDs cannot be rolled back into another tax-advantaged retirement account.
18. Does this calculator apply to inherited 401(k)s?
No. While similar rules apply, the distribution tables and factors may differ.
19. Is this tool mobile-friendly?
Yes, the calculator is responsive and works well on desktops, tablets, and smartphones.
20. What if I make a mistake?
Click the Reset button to clear all fields and start fresh. Always double-check your numbers with a financial advisor if unsure.
Final Thoughts
Calculating your Inherited IRA Required Minimum Distribution doesn’t have to be complicated. With this easy-to-use RMD calculator, you’ll get an instant, reliable estimate that helps you stay compliant with IRS rules and manage your financial future effectively.
Whether you’ve just inherited an IRA or you’re managing long-term withdrawals, use this tool annually to simplify your process and avoid costly errors.