Inherited IRA 10-Year Rule Calculator
Calculate your inherited IRA distribution schedule under the SECURE Act 2.0 10-year rule. Enter your inherited balance, beneficiary type, and whether the original owner had started RMDs to see your required annual distributions, total tax estimate, and year-by-year depletion timeline — free and private.
What Is the Inherited IRA 10-Year Rule?
The inherited IRA 10-year rule requires most non-spouse beneficiaries to fully deplete an inherited IRA by December 31 of the 10th calendar year following the year of the original account owner's death. This rule was established by the Setting Every Community Up for Retirement Enhancement (SECURE) Act of 2019 and clarified by SECURE 2.0 (enacted December 2022, P.L. 117-328). For example, if the original owner died in 2025, the entire inherited balance must be withdrawn by December 31, 2035. Unlike the pre-SECURE Act "stretch IRA" strategy — which allowed beneficiaries to take distributions over their own lifetime — the 10-year rule accelerates taxation and prevents multi-generational tax deferral. Source: IRS.gov required minimum distributions and IRS Notice 2024-35. Last updated May 2026.
When Are Annual RMDs Required vs Optional?
Whether you must take annual required minimum distributions (RMDs) in years 1 through 9 depends on whether the original owner had reached their Required Beginning Date (RBD) at the time of death. Under SECURE 2.0, the RBD is April 1 of the calendar year after the owner turns 73 (for those born after 1950).
- Owner died BEFORE RBD (before starting RMDs): No annual RMDs are required in years 1–9. You can take any amount at any time — or nothing at all — as long as the full balance is distributed by December 31 of year 10. This flexibility allows significant tax planning.
- Owner died ON OR AFTER RBD (was already taking RMDs): You must take annual RMDs in years 1–9 based on your own single life expectancy using IRS Table I. The remaining balance, if any, must be fully withdrawn by December 31 of year 10. Missing these annual RMDs triggers a 25% excise tax (reduced from 50% by SECURE 2.0), or 10% if corrected within 2 years.
The IRS waived annual RMD penalties for inherited IRAs subject to the 10-year rule for tax years 2021 through 2024 (IRS Notice 2024-35) due to regulatory transition guidance. For 2025 and beyond, penalties apply in full.
Eligible Designated Beneficiaries — Who Is Exempt?
Eligible Designated Beneficiaries (EDBs) are not subject to the 10-year rule and may instead use a "lifetime stretch" — taking RMDs over their own actuarial life expectancy. EDBs include: (1) surviving spouses, who may also roll the inherited IRA into their own IRA; (2) individuals who are disabled within the IRS definition; (3) chronically ill individuals; (4) beneficiaries not more than 10 years younger than the deceased owner; and (5) minor children of the account owner — but only until the child reaches the age of majority (typically 18-21 depending on state law), after which the 10-year rule begins counting from that date. Most adult children, grandchildren, siblings, and other non-spouse beneficiaries are Non-EDBs and face the 10-year rule.
Tax Strategy — How to Minimize Your Tax Bill
Because inherited traditional IRA distributions are taxed as ordinary income, large distributions in a single year can push you into higher marginal tax brackets. The 10-year rule actually offers an opportunity: you control when within the 10-year window you take distributions. Optimal strategies include: spreading distributions evenly to stay within your current bracket; taking larger distributions in lower-income years (e.g., if you have a business loss, large deductions, or retire); deferring distributions until year 10 if your income is expected to decline; or front-loading distributions in years when your bracket is lower than expected future years. Pair this calculator with the capital gains vs ordinary income comparison to model bracket optimization. For Roth IRAs: qualified distributions are tax-free if the 5-year holding period has been met — no tax planning needed for inherited Roth accounts held over 5 years. Source: IRS Publication 590-B (Distributions from Individual Retirement Arrangements).
Common Inherited IRA Mistakes to Avoid
The most costly inherited IRA mistake is waiting until year 10 and discovering a massive tax bill. If you inherit a $500,000 traditional IRA and take the entire distribution in year 10, that $500,000 (plus growth) lands as ordinary income in a single tax year — potentially pushing you into the 37% federal bracket. Spread over 10 years, the same $500,000 may stay largely in the 22%–24% brackets, saving $60,000–$70,000 in federal taxes alone. Other mistakes: failing to retitle the account as an "inherited IRA" (you cannot roll it into your own IRA as a non-spouse), missing the year 10 deadline, and not taking annual RMDs when the owner had already begun them.