RMD calculator (SECURE Act).

The SECURE Act changed the inherited IRA game

Before the SECURE Act, most non-spouse beneficiaries could take inherited IRA distributions over their own life expectancy, commonly called the stretch IRA. A 40-year-old inheriting from a parent could spread taxable distributions across 40-plus years, producing decades of tax-deferred growth and modest annual tax hits. The SECURE Act, effective for deaths on or after January 1, 2020, eliminated that treatment for most beneficiaries.

The 10-year rule in plain English

For non-spouse beneficiaries who inherited on or after January 1, 2020, and who are not Eligible Designated Beneficiaries, the inherited IRA must be fully distributed by December 31 of the 10th year after the year of the original owner's death. If the owner died in 2024, the account must be empty by December 31, 2034.

There is no required distribution pattern inside the 10 years by default. A beneficiary can take equal annual distributions, wait and empty the account in year 10, or anything in between. In practice, spreading distributions to smooth taxable income is almost always the better plan.

Eligible Designated Beneficiaries who can still stretch

Five categories of beneficiary can still take distributions over their own single life expectancy:

• Surviving spouses.
• Minor children of the account owner, until they reach the age of majority (treated as age 21 under the IRS final regulations), then the 10-year clock begins.
• Disabled individuals (under IRC section 72(m)(7)).
• Chronically ill individuals.
• Individuals who are not more than 10 years younger than the deceased owner (siblings, partners, some friends).

The annual RMD wrinkle inside the 10 years

The IRS final regulations (issued in 2024) settled a question that had confused advisors for years. If the original owner had ALREADY begun taking RMDs before death (meaning the owner died on or after their required beginning date), then a non-EDB beneficiary subject to the 10-year rule must ALSO take annual RMDs in years 1 through 9 based on the beneficiary's single life expectancy. The account still must be empty by the end of year 10.

If the original owner died BEFORE their required beginning date, no annual RMDs are required inside the 10-year window. The beneficiary can wait until year 10 and take the whole balance in one shot, though this is almost always a bad tax outcome.

The IRS granted waivers for missed annual RMDs during 2020 through 2024 while the regulations were being finalized. Post-2024, expect enforcement to resume as written.

Spouse options are broader

A surviving spouse has the most flexibility and often the best tax outcomes:

• Treat as own. The spouse rolls or retitles the balance into their own IRA. RMDs then follow the surviving spouse's own required beginning date. Best for spouses under RMD age with plenty of other income.
• Keep as inherited. The spouse takes life- expectancy distributions as a beneficiary. Useful when the surviving spouse is under 59 and a half and needs penalty-free access.
• 10-year rule. Available as an election in some cases. Rarely optimal unless the surviving spouse's tax situation makes an accelerated payout attractive.

The tax-planning angle (where an advisor adds value)

The forced payout is a tax event, not just an administrative one. Concentrating distributions in a single high-income year can push the beneficiary into higher federal brackets, trigger higher long-term capital gains rates, add the 3.8% net investment income tax, and (for beneficiaries near retirement) drive Medicare IRMAA surcharges two years later.

A good plan generally spreads distributions across years that line up with the beneficiary's lower-income windows, coordinates with Roth conversions where appropriate, and considers charitable strategies for beneficiaries who are already giving. The math alone is not the plan. The plan is the sequencing.

Using the results

Choose the beneficiary type, enter the year the owner died, indicate whether RMDs had already begun, and enter the current balance and beneficiary age. The tool will identify the rule that applies, calculate the deadline, and lay out a suggested year-by-year distribution schedule. Treat the schedule as a starting point for planning, then adjust based on the beneficiary's other income across each year.