How to Use the Inherited IRA Distribution Calculator
Managing an inherited IRA (Individual Retirement Account) has become significantly more complex since the passage of the SECURE Act in 2019 and SECURE Act 2.0 in 2022. This calculator helps you determine which IRS rules apply to your specific situation based on the date of death and your relationship to the original owner.
The 10-Year Rule vs. Life Expectancy
Under current IRS regulations, most non-spouse beneficiaries are subject to the 10-Year Rule. This requires the entire balance of the inherited IRA to be withdrawn by December 31st of the tenth year following the year of the owner's death.
Designated Beneficiaries: Most children, grandchildren, and friends fall here. If the owner died after 2019, you likely must empty the account within 10 years.
Eligible Designated Beneficiaries (EDBs): This includes surviving spouses, minor children (until they reach the age of majority), disabled or chronically ill individuals, and beneficiaries not more than 10 years younger than the deceased. EDBs may still "stretch" distributions over their own life expectancy.
Non-Designated Beneficiaries: Entities like estates or certain trusts usually must empty the account within 5 years if the owner died before their Required Beginning Date (RBD).
SECURE Act 2.0 and Annual RMDs
A common point of confusion is whether you must take annual Required Minimum Distributions (RMDs) during that 10-year window. If the original owner had already started taking RMDs (reached age 72, 73, or 75 depending on their birth year), you are generally required to continue taking annual distributions based on your life expectancy, in addition to emptying the account by the 10th year.
Example Calculation
Imagine you inherited a $200,000 IRA from a parent who passed away in 2023 at age 78. Because the parent had already reached their Required Beginning Date, you (as a Designated Beneficiary) must take annual RMDs based on your life expectancy for years 1 through 9, and then withdraw any remaining balance by the end of Year 10.
function calculateDistributions() {
var balance = parseFloat(document.getElementById('iraBalance').value);
var deathYear = parseInt(document.getElementById('deathYear').value);
var benType = document.getElementById('benType').value;
var benAge = parseInt(document.getElementById('benAge').value);
var ownerAge = parseInt(document.getElementById('ownerAge').value);
var output = document.getElementById('distributionOutput');
var resultsArea = document.getElementById('resultsArea');
if (isNaN(balance) || isNaN(deathYear) || isNaN(benAge) || isNaN(ownerAge)) {
alert("Please fill in all fields with valid numbers.");
return;
}
resultsArea.style.display = "block";
var message = "";
var deadlineYear = deathYear + 10;
var rbdAge = 72;
if (deathYear >= 2023) rbdAge = 73;
// Simple Life Expectancy Table Simulation (IRS Table I – Single Life)
// Starts at age 0=84.6 down to 120=1.0.
// Approximation: 84 – age (rough estimate for demo logic)
var divisor = 84.6 – benAge;
if (divisor < 1) divisor = 1;
var rmdEstimate = balance / divisor;
if (deathYear < 2020) {
message = "Pre-SECURE Act Rules Apply:";
message += "You likely qualify for the 'Stretch' provision. Your estimated first-year RMD is $" + rmdEstimate.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2}) + " based on a life expectancy factor of " + divisor.toFixed(1) + ".";
} else {
if (benType === "edb") {
message = "Eligible Designated Beneficiary:";
message += "You qualify for Life Expectancy distributions. Your estimated first-year RMD is $" + rmdEstimate.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2}) + ". You are not strictly bound by the 10-year rule as long as you maintain EDB status.";
} else if (benType === "nondesignated") {
var deadline = deathYear + 5;
message = "Non-Designated Beneficiary (5-Year Rule):";
message += "The entire account balance must be distributed by December 31, " + deadline + ". Annual RMDs are typically not required unless the owner died after their Required Beginning Date.";
} else {
message = "10-Year Rule Applies:";
message += "You must fully distribute the account by December 31, " + deadlineYear + ".";
if (ownerAge >= rbdAge) {
message += "Note: Since the owner passed away after their Required Beginning Date, you are likely required to take Annual RMDs for years 1-9. Your year 1 estimate is $" + rmdEstimate.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2}) + ".";
} else {
message += "Since the owner died before their Required Beginning Date, annual RMDs are generally not required during the 10-year period, but the account must still be empty by the end of " + deadlineYear + ".";
}
}
}
output.innerHTML = message;
}