Inherited Ira Calculator

An Inherited IRA comes with a unique set of rules, timelines, and tax implications that can be confusing. Whether you’re a spouse, child, or non-family beneficiary, understanding how and when you must withdraw funds from an inherited IRA is crucial to maximizing your inheritance and avoiding IRS penalties.

To help navigate these complexities, we’ve created a free Inherited IRA Calculator. This powerful tool takes your personal situation into account—like your age, relationship to the original account owner, expected returns, and more—to give you a clear picture of your required minimum distributions (RMDs) and how long the funds may last.

In this article, we’ll walk you through how the calculator works, show examples, and answer the most common questions beneficiaries have about inherited IRAs.

What Is the Inherited IRA Calculator?

The Inherited IRA Calculator is an interactive tool designed to estimate:

  • Your required distribution schedule based on IRS rules
  • Account depletion timelines
  • How different relationships (spouse, child, etc.) affect withdrawals
  • Expected growth on the remaining balance
  • Basic tax considerations

It’s especially useful for navigating the SECURE Act (2019) and SECURE 2.0 (2022) rules, which changed how beneficiaries must withdraw funds.

How to Use the Inherited IRA Calculator (Step-by-Step)

Using the calculator is quick and easy. Follow these steps:

  1. Enter the Inherited IRA Account Value ($)
    Input the current value of the IRA you’ve inherited.
  2. Enter the Beneficiary’s Current Age
    Your current age helps determine your distribution window and method.
  3. Select Your Relationship to the Original IRA Owner
    Options include:
    • Spouse
    • Child
    • Other Family Member
    • Non-Family Beneficiary
  4. Enter the Year the Original Owner Passed Away
    This determines whether pre- or post-SECURE Act rules apply.
  5. Set Your Expected Annual Return (%)
    Optional, but defaults to 5%. This helps estimate future account growth.
  6. Click “Calculate”
    You’ll instantly receive a customized breakdown, including:
    • Which IRS withdrawal rule applies to you
    • A five-year projection of required distributions
    • Estimated balance growth
    • Depletion year
    • Tax-related insights

Example Scenario

Let’s consider a real-world example.

  • IRA Value: $500,000
  • Beneficiary Age: 45
  • Relationship: Non-Family Beneficiary
  • Year of Death: 2022
  • Expected Return: 6%

Result:

  • Rule: Must use the 10-year rule (account must be emptied by 2032).
  • Estimated Annual Distribution: ~$50,000 – $60,000 depending on growth.
  • Account Balance after 5 Years: Still growing due to compound interest, even with annual withdrawals.
  • Final Depletion: Year 10
  • Tax Note: Withdrawals are taxed as ordinary income if it’s a traditional IRA.

This gives the beneficiary a clear financial roadmap and helps with tax planning.

Why This Calculator Matters

Inherited IRA rules are not one-size-fits-all. With the SECURE Act and its updates, many beneficiaries face:

  • Shorter withdrawal windows (10 years for most non-spouse beneficiaries)
  • Tax surprises due to lump-sum distributions
  • Confusion about when RMDs must start

The calculator helps clarify:

  • When distributions must begin
  • How much to expect annually
  • How long the funds will last
  • How to plan for taxes

This empowers you to make better financial decisions, potentially saving thousands in taxes or penalties.

Common Use Cases

  • Estate Planning: Advisors use it to help clients plan distributions.
  • Beneficiaries: Understand your responsibilities immediately after inheriting.
  • Spouses: Decide between treating the IRA as their own or using life expectancy-based distributions.
  • Children or Dependents: Estimate income and tax impacts.

15+ Inherited IRA FAQs

1. What is an inherited IRA?
An inherited IRA is an account that a beneficiary receives after the death of the original IRA owner. It has special rules for withdrawals.

2. Do I have to take money out of an inherited IRA?
Yes, most beneficiaries must withdraw funds based on either the 10-year rule or their life expectancy, depending on the relationship and year of death.

3. What is the 10-year rule?
It requires beneficiaries to empty the account within 10 years after the original owner’s death.

4. Do spouses have more options?
Yes. Spouses can treat the IRA as their own, delay RMDs, or use their life expectancy to spread withdrawals.

5. What if the original owner died before 2020?
You may qualify for life expectancy-based withdrawals instead of the 10-year rule.

6. Are inherited IRA withdrawals taxable?
Yes, if it’s a traditional IRA. Roth IRAs are typically tax-free if held for 5+ years.

7. When do RMDs start for an inherited IRA?
It varies. Under the SECURE Act, RMDs aren’t required during years 1–9 under the 10-year rule, but the entire account must be withdrawn by year 10.

8. What if I’m a minor child?
You can use life expectancy-based distributions until age 18, then the 10-year rule applies.

9. What happens if I don’t withdraw in time?
The IRS may impose a 25% penalty on missed RMDs.

10. Can I convert an inherited traditional IRA to a Roth IRA?
No. Inherited IRAs cannot be converted.

11. Do I have to take equal distributions each year?
Not necessarily. The 10-year rule gives flexibility, but some may choose equal withdrawals for budgeting.

12. What if there are multiple beneficiaries?
The account can be split so each beneficiary uses their own timeline and strategy.

13. Can I roll over an inherited IRA into my own IRA?
Only spouses can do this.

14. How does the expected return affect my withdrawals?
A higher return may increase your remaining balance and reduce risk of early depletion.

15. Do Roth inherited IRAs follow the same rules?
Yes, but withdrawals are generally tax-free. The 10-year rule still applies.

16. Can I use the funds for anything?
Yes. Withdrawals can be used freely but will be taxed as ordinary income in traditional IRAs.

17. What’s the difference between designated and non-designated beneficiaries?
Designated beneficiaries are individuals, while non-designated could be estates or charities, affecting payout rules.

18. Can trusts inherit IRAs?
Yes, but the rules depend on the trust type and IRS classification.

19. Are there exceptions to the 10-year rule?
Yes. “Eligible designated beneficiaries” like disabled individuals or minor children have different rules.

20. Do I need a financial advisor to handle an inherited IRA?
Not required, but helpful for navigating tax implications and optimizing withdrawals.

Start Planning Today

Inheritance can be a financial blessing—but only if managed wisely. With this calculator, you’re not left guessing. Know what rules apply, how much you’ll need to take out, and how long your inherited IRA will last.

Use the Inherited IRA Calculator now and make informed, strategic decisions for your financial future.