Inherited 401(k) RMD Calculator

SECURE Act 10-Year Rule — Final 2024 Regulations

The SECURE Act of 2019 (and SECURE 2.0 of 2022) eliminated the "stretch IRA" for most non-spouse beneficiaries. Inherited 401(k) and IRA balances must now be fully distributed within 10 years of the original owner's death. The final IRS regulations issued July 2024 clarified that annual RMDs are required during years 1–9 if the original owner had already reached their required beginning date (RBD — typically age 73 under SECURE 2.0). Year 10 must zero out the account. Eligible designated beneficiaries (EDBs) — spouses, minor children of the deceased, disabled or chronically ill individuals, and beneficiaries within 10 years of the deceased's age — can still stretch over their life expectancy (source: IRS Final Regs T.D. 10001, SECURE 2.0 Act).

Annual RMD vs Year-10 Lump Sum — Tax Strategy

For non-EDB beneficiaries who must empty in 10 years, the distribution strategy materially affects total tax. Lump sum year 10: Maximizes tax-deferred growth but creates a single huge taxable event that may push you into the top bracket. Even annual: Spreads the tax over 10 years, often staying in lower brackets but sacrifices some tax-deferred growth. Tax-bracket optimization: Front-load distributions in years your other income is lower (e.g., gap years between jobs, early retirement), defer in high-income years. Run multiple scenarios — tax-bracket arbitrage typically saves $30,000–$100,000 over the 10-year window on a $500K inherited account.

Spouse vs Non-Spouse Inheritance

Spouse beneficiary: May roll inherited 401(k) into own IRA, treat as own (use own age for RMDs starting at 73), or remain as beneficiary (stretch over life expectancy). Most flexible. Generally roll into own IRA unless under 59½ and need penalty-free access. Non-spouse beneficiary: Must use 10-year rule (or stretch if EDB). Cannot roll into own IRA. Must transfer via direct trustee-to-trustee to an inherited IRA — never take a check, which triggers full taxation. Inherited Roth 401(k): also subject to 10-year rule but withdrawals tax-free if 5-year holding rule met.

RMD Calculation Method

For EDBs and post-death year-of-death RMD: use the IRS Single Life Expectancy Table. Find your age in the year following death; subtract one each subsequent year. RMD = prior year-end balance ÷ remaining life expectancy. For year-of-death RMD (if owner died after RBD and had not yet taken that year's RMD): calculated using owner's age. Failure to take RMD triggers a 25% excise tax (reduced to 10% if corrected within 2 years per SECURE 2.0). The 25% penalty replaced the prior 50% penalty for missed RMDs.

2026 Tax-Planning Tactics for Inherited 401(k)

(1) Roth conversion within plan is NOT allowed for inherited accounts; you can only convert if you are a spouse who treats the account as their own. (2) QCD (Qualified Charitable Distribution) is not available from inherited 401(k)s for non-spouse beneficiaries — only from inherited IRAs and only if the beneficiary is 70½+. (3) Bracket arbitrage: If you have a low-income year (sabbatical, parental leave, early retirement before Social Security), withdraw extra to fill the lower brackets. (4) Tax-loss harvesting in taxable accounts can offset portion of inherited 401(k) tax via reduced overall AGI. Compare with our inherited IRA calculator, RMD calculator, QCD calculator, 72(t) early retirement.

Last updated April 2026. Estimates only — final regs are complex; consult a CPA or estate attorney. Sources: IRS Pub 590-B, IRS Final Regs T.D. 10001 (July 2024), SECURE 2.0 Act.