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Beneficiary Required Minimum Distributions (RMD)

When you are the beneficiary of a retirement plan, specific IRS rules regulate the minimum withdrawals you must take. If you want to simply take your inherited money right now and pay taxes, you can. But if you want to defer taxes as long as possible, there are certain distribution requirements with which you must comply. Use this calculator to determine your Required Minimum Distributions (RMD) as a beneficiary of a retirement account. This calculator has been updated for the 'SECURE Act of 2019 and CARES Act of 2020'.

Beneficiary Required Minimum Distributions (RMD) Definitions

Calculation notes
This calculator follows the SECURE Act of 2019 Required Minimum Distribution (RMD) rules. If you have questions, please consult with your own tax advisor regarding your specific situation.

Use this calculator if any of the following apply:

  1. The original account owner died before 1/1/2020
  2. Or - the spouse is the only beneficiary of the account
  3. Or - the beneficiary is not an under age child of the account owner and not chronically ill

This calculator is not designed for the additional RMD options are available to non-spouse Designated Eligible Beneficiaries for years 2020 and after. Eligible Designated Beneficiaries include a child of the account owner (but generally only until they are 18, at that point the 10 year rule begins) or a chronically ill individual. For more information please see Modification of Required Distribution Rules for Designated Beneficiaries.

IMPORTANT! This calculator has been updated for the SECURE Act of 2019 and the CARES Act of 2020. The IRS, however, has not yet released procedures for their implementation. Future IRS published procedures may have an impact on enforcement and interpretation of these Acts.

Life expectancy calculations

The new rules for the SECURE Act of 2019 are used when an account owner dies after 12/31/2019. Most non-spousal beneficiaries have until the end of the year that contains the 10th anniversary of the original account owner's death to withdraw all funds. There are no minimum distributions required, but for our illustration we assume distributions happen evenly over the 10 years.

The SECURE Act of 2019 doesn't change a spouse's option to treat inherited account as his or her own. In this case, no distributions are required until the year in which the spouse reaches age 72 (or 70 1/2 if born before 7/1/1949) . When distributions do begin, the spouse can use the Uniform Lifetime Table, which produces longer life expectancies than the Single Life Expectancy table, to determine the applicable life expectancy. In addition, a spouse is able to 'recalculate' or lookup a new life expectancy from the Uniform Lifetime Table each year. This produces the lowest RMD in all but the most unusual situations. This calculator will always assume that a spouse will wish to treat an inherited IRA as their own.

For account owners who died before 1/1/2020 the pre-SECURE Act rules apply. The life expectancy is usually determined using the Single Life Expectancy table and the beneficiary's age on December 31st of the year following the owner's death. However, if this is not the first year of distribution for the beneficiary, there is an additional step. First, we find the original life expectancy using the Single Life Expectancy table and the beneficiary's age on December 31st of the year following the owner's death. Then, the current life expectancy is calculated by subtracting one for each year that has passed, from the original life expectancy. Likewise, in all future years, the remaining life expectancy is calculated by subtracting one for each additional year that has passed. It is not allowed to lookup or 'recalculate' a new starting life expectancy after distributions have begun.

If the account owner was younger than the beneficiary, and it was past the required begin date for required minimum distributions when the account owner died, the beneficiary can choose to use the account owner's life expectancy to calculate Required Minimum Distributions (RMD). In this special case, the result will always produce a lower RMD. If this situation occurs, this calculator will use the account owner's age to determine the applicable life expectancy when calculating RMDs. Other than using the account owner's age at death, the calculation is identical to the one stated above.

Year of RMD
The year to calculate the Required Minimum Distribution (RMD). This is typically the current year. Change the year to calculate a previous year's RMD.
Account balance as of December 31st of year prior to the distribution year
This is the fair market value of your account as of the close of business on December 31st of the preceding year.
Estimated rate of return (provides an estimate of future RMDs)
This is the expected rate of return on your account. This is only used to help project your future account balances (which of course will impact your required minimum distribution). The actual rate of return is largely dependent on the types of investments you select. The Standard & Poor's 500® (S&P 500®) for the 10 years ending December 31st 2019, had an annual compounded rate of return of 13.2%, including reinvestment of dividends. From January 1, 1970 to December 31st 2019, the average annual compounded rate of return for the S&P 500®, including reinvestment of dividends, was approximately 10.7% (source: www.standardandpoors.com). Since 1970, the highest 12-month return was 61% (June 1982 through June 1983). The lowest 12-month return was -43% (March 2008 to March 2009). Savings accounts at a financial institution may pay as little as 0.25% or less but carry significantly lower risk of loss of principal balances.

It is important to remember that these scenarios are hypothetical and that future rates of return can't be predicted with certainty and that investments that pay higher rates of return are generally subject to higher risk and volatility. The actual rate of return on investments can vary widely over time, especially for long-term investments. This includes the potential loss of principal on your investment. It is not possible to invest directly in an index and the compounded rate of return noted above does not reflect sales charges and other fees that investment funds and/or investment companies may charge.

Owner birthdate
Enter the original account owner's birthdate.
Beneficiary birthdate
Enter the beneficiary's birth date. This is used for calculating life expectancy. For spousal beneficiaries this is used to lookup your annual life expectancy at year. For non-spousal RMDs not subject to the SECURE Act we use this to calculate the life expectancy of the beneficiary.
Owner dies
Enter the date that the original account owner died.
Is account owner beneficiary's spouse?
If the original account owner was your spouse, and you were the sole beneficiary, then you have the ability to treat the inherited account as if it were your own. This is the most flexible and usually the best choice for this type of beneficiary. This calculator assumes that this is an option you would like to take. If you check this box, normal account owner distribution rules apply, including, but not limited to, minimum distributions not being required until you reach age 72 (or 70 1/2 if born before 7/1/1949).