Inheriting an IRA comes with specific distribution requirements that differ significantly from those for original account owners. The rules changed substantially with the SECURE Act of 2019 and subsequent IRS regulations, and 2025 marks the first year that penalties for missed RMDs are being enforced for many beneficiaries. Understanding how to calculate RMD for an inherited IRA is essential for avoiding costly penalties and managing your tax liability.
The calculation method depends on several factors: your relationship to the deceased, when the original owner died, whether they had already started taking RMDs, and your beneficiary classification. This guide walks through the calculation process for each scenario with practical examples you can apply to your own situation.
The Basic RMD Calculation Formula
The fundamental formula for calculating an inherited IRA RMD is straightforward:
RMD = Account Balance (December 31 of prior year) ÷ Life Expectancy Factor
The complexity lies in determining which life expectancy factor to use and whether annual RMDs are required at all. The IRS publishes three life expectancy tables in Publication 590-B, and inherited IRAs primarily use the Single Life Expectancy Table (Table I).
For most non-spouse beneficiaries, you find your life expectancy factor based on your age in the year after the original owner’s death, then reduce that factor by 1.0 for each subsequent year. Spouse beneficiaries have more flexibility and can recalculate their life expectancy each year by looking up their current age in the table.
Determining Your Beneficiary Classification
Before calculating your RMD, you need to understand your beneficiary classification under the SECURE Act. The rules differ substantially based on which category you fall into.
- Eligible Designated Beneficiaries (EDBs) can still stretch distributions over their life expectancy. This category includes surviving spouses, minor children of the deceased (until they reach age 21), individuals who are disabled or chronically ill, and individuals who are not more than 10 years younger than the deceased.
- Non-Eligible Designated Beneficiaries (NEDBs) are subject to the 10-year rule. This includes most adult children, grandchildren, siblings, and other individual beneficiaries who don’t qualify as EDBs.
- Non-Designated Beneficiaries include estates, charities, and certain trusts. These beneficiaries typically must empty the account within five years if the original owner died before their required beginning date, or use the deceased owner’s remaining life expectancy if death occurred after the required beginning date.
Understanding inherited IRA rules and tax strategies helps you determine which rules apply to your situation.
The 10-Year Rule and Annual RMD Requirements
The 10-year rule requires non-eligible designated beneficiaries to fully distribute the inherited IRA by December 31 of the year containing the 10th anniversary of the original owner’s death. However, whether annual RMDs are required during those 10 years depends on when the original owner died.
- If the original owner died before their required beginning date, no annual RMDs are required. You can withdraw funds in any amount, at any time, as long as the entire account is emptied by the end of year 10. The required beginning date is April 1 of the year after the owner would have turned 73 (or 75 for those born in 1960 or later).
- If the original owner died on or after their required beginning date, annual RMDs are required in years 1 through 9, calculated using your single life expectancy. The remaining balance must be distributed by the end of year 10, regardless of what the life expectancy calculation would suggest.
The IRS waived penalties for missed RMDs from 2021 through 2024 while finalizing the regulations. Starting in 2025, those penalties are being enforced. (Per IRS Notice 2024-35, which ended the waiver period after 2024. Beneficiaries should verify whether any additional guidance has been issued.) If you inherited an IRA after 2019 and have not been taking annual distributions, you may need to start now if the original owner had already begun their RMDs.
Calculating RMDs for Non-Spouse Beneficiaries Under the 10-Year Rule
For non-eligible designated beneficiaries who inherited from someone who died after their required beginning date, here’s the step-by-step calculation process:
- Step 1: Determine your age in the year following the original owner’s death. This is your “baseline” age for the calculation.
- Step 2: Look up the life expectancy factor for your baseline age in the IRS Single Life Expectancy Table.
- Step 3: For each subsequent year, subtract 1.0 from your original life expectancy factor.
- Step 4: Divide the December 31 account balance from the prior year by your applicable life expectancy factor.
Example: Sarah inherited her father’s traditional IRA in 2022 when she was 50 years old. Her father was 78 when he died, past his required beginning date. Sarah’s baseline age for the calculation is 51 (her age in 2023, the year after death). The Single Life Expectancy factor for age 51 is 34.2.
For 2025, Sarah’s life expectancy factor is 34.2 minus 2 (for 2024 and 2025) = 32.2. If the inherited IRA balance on December 31, 2024, was $500,000, Sarah’s 2025 RMD is $500,000 ÷ 32.2 = $15,528.
For 2026, her factor drops to 31.2, and she divides the December 31, 2025, balance by 31.2 to determine her RMD. This continues through 2031 (year 9), and any remaining balance must be distributed by December 31, 2032 (year 10).
Calculating RMDs for Surviving Spouses
Surviving spouses have the most flexibility when inheriting an IRA. They can treat the inherited IRA as their own, roll it into their existing IRA, or remain a beneficiary of the inherited IRA.
- Option 1: Treat the IRA as your own. If you elect this option, the inherited IRA becomes your own IRA. You don’t need to take RMDs until you reach age 73, and you use the Uniform Lifetime Table (Table III) rather than the Single Life Table.
- Option 2: Remain as beneficiary. Surviving spouses who choose to remain beneficiaries can delay RMDs until the later of December 31 of the year following the owner’s death, or December 31 of the year the deceased spouse would have turned 73. When RMDs begin, surviving spouses use the Single Life Expectancy Table but can recalculate their life expectancy each year by looking up their current age.
Example: Linda’s husband died in 2024 at age 70, before his required beginning date. Linda is 68. If she remains as beneficiary, she can wait until the year her husband would have turned 73 (2027) to begin taking RMDs. Each year, she looks up her current age in the Single Life Expectancy Table rather than reducing a fixed factor by 1.0.
If the inherited IRA balance on December 31, 2026, is $800,000 and Linda is 71 in 2027, her life expectancy factor is 18.0. Her 2027 RMD is $800,000 ÷ 18.0 = $44,444.
In 2028, if Linda is 72 and the balance is $780,000, she looks up age 72 in the table (17.2) and calculates: $780,000 ÷ 17.2 = $45,349.
Calculating RMDs for Eligible Designated Beneficiaries
Eligible designated beneficiaries other than surviving spouses can stretch distributions over their own life expectancy, similar to the pre-SECURE Act rules. These beneficiaries include disabled or chronically ill individuals, minor children (until age 21), and individuals not more than 10 years younger than the deceased.
The calculation follows the same process as for non-spouse beneficiaries under the 10-year rule: find your life expectancy factor for your age in the year after death, then reduce by 1.0 each subsequent year. The difference is that EDBs aren’t subject to the 10-year limitation and can continue distributions based on their life expectancy.
Example: James, age 60, inherited an IRA from his brother, who was 62 when he died in 2024. Since James is not more than 10 years younger than his brother, he qualifies as an EDB. James’s baseline age is 61 (his age in 2025). The Single Life Expectancy factor for age 61 is 26.2.
James’s 2025 RMD is the December 31, 2024, balance divided by 26.2. In 2026, his factor is 25.2. In 2027, it’s 24.2, and so on. James can stretch distributions over his entire life expectancy rather than being forced to empty the account within 10 years.
Note that minor children who inherit become subject to the 10-year rule once they reach age 21, at which point they must fully distribute the remaining balance within 10 years.
The Single Life Expectancy Table
Here are selected values from the IRS Single Life Expectancy Table (Table I) commonly used for inherited IRA calculations:
| Age | Life Expectancy Factor | Age | Life Expectancy Factor |
| 40 | 45.7 | 60 | 27.1 |
| 45 | 41.0 | 65 | 22.9 |
| 50 | 36.2 | 70 | 18.8 |
| 55 | 31.6 | 75 | 14.8 |
| 58 | 28.9 | 80 | 11.2 |
| 59 | 27.9 | 85 | 8.1 |
For beneficiaries who started taking RMDs before 2022 and are still using the reduce-by-one method, you must use the updated life expectancy factors that took effect in 2022. This means resetting your baseline to what the new table shows for your age in the year you first calculated your RMD, then reducing from there.
Inherited Roth IRA RMD Rules
Inherited Roth IRAs have different rules from inherited traditional IRAs. While distributions from inherited Roth IRAs are generally tax-free (assuming the five-year holding period has been met), beneficiaries are still subject to distribution requirements.
Non-eligible designated beneficiaries must empty an inherited Roth IRA within 10 years, but no annual RMDs are required during that period, regardless of whether the original owner had reached their required beginning date. This is because Roth IRA owners are never required to take RMDs during their lifetime, so the “at least as rapidly” rule doesn’t create annual RMD obligations.
Eligible designated beneficiaries can stretch distributions from inherited Roth IRAs over their life expectancy using the same calculation method as traditional IRAs, though the distributions remain tax-free.
Understanding inherited Roth IRAs and the ten-year rule can help you optimize the timing of your distributions for maximum tax efficiency.
Penalties for Missed RMDs
If you fail to take your required minimum distribution, the penalty is 25% of the amount you should have withdrawn but didn’t. This penalty can be reduced to 10% if you correct the mistake within two years by taking the missed distribution and filing Form 5329.
Given that the IRS waived penalties for 2021 through 2024, many beneficiaries may be taking their first required distribution in 2025. If you inherited an IRA after 2019 from someone who had already started taking RMDs, make sure you understand whether annual distributions are required in your situation.
Tax Planning Considerations
How you time your inherited IRA distributions can significantly affect your overall tax liability. Large distributions in a single year can push you into higher tax brackets, trigger the net investment income tax, impact your Medicare premiums, or affect the taxation of your Social Security benefits.
If you’re subject to the 10-year rule without annual RMD requirements (because the original owner died before their required beginning date), you have flexibility in when to take distributions. Strategies include taking larger distributions in years when your other income is lower, spreading distributions evenly over the 10-year period, or accelerating distributions before anticipated tax rate increases.
Understanding how Roth conversions and RMDs interact can also inform your broader retirement tax planning. And if you’re an IRA owner thinking about your own beneficiaries, estate planning and Roth conversions offers strategies to minimize the tax burden on your heirs.
Using Calculation Tools
While the formula is straightforward, the variables involved can make inherited IRA RMD calculations complex. Use our RMD calculator to determine your required distribution based on your specific circumstances.
Keep records of your account balances, distribution amounts, and the life expectancy factors you use each year. This documentation will help you verify that you’re meeting your obligations and can be useful if questions arise during tax preparation.
Conclusion
Calculating RMD for an inherited IRA requires understanding your beneficiary classification, determining whether annual distributions are required, and applying the correct life expectancy factor. For most non-spouse beneficiaries who inherited after 2019, the 10-year rule applies, with annual RMDs required only if the original owner died after their required beginning date.
The key calculation steps are: determine the December 31 balance from the prior year, find your applicable life expectancy factor (either recalculated annually for spouses or reduced by 1.0 each year for others), and divide the balance by the factor.
With penalties for missed RMDs now being enforced starting in 2025, beneficiaries who have been waiting should review their obligations and begin taking distributions if required. For complex situations involving trusts, multiple beneficiaries, or questions about your specific classification, working with a financial advisor can help ensure you meet all requirements while optimizing your tax situation.
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Frequently Asked Questions
Do I have to take annual RMDs from an inherited IRA?
It depends on your beneficiary classification and when the original owner died. Non-eligible designated beneficiaries must take annual RMDs only if the original owner died on or after their required beginning date. If the owner died before that date, no annual RMDs are required, but the account must be emptied within 10 years. Eligible designated beneficiaries must take annual RMDs based on their life expectancy.
What life expectancy table do I use for an inherited IRA?
Most beneficiaries use the Single Life Expectancy Table (Table I) from IRS Publication 590-B. Surviving spouses who treat the inherited IRA as their own use the Uniform Lifetime Table (Table III). Spouse beneficiaries who remain as beneficiaries can recalculate their life expectancy each year using Table I.
What is the penalty for not taking an inherited IRA RMD?
The penalty is 25% of the amount you should have withdrawn but didn’t. This penalty can be reduced to 10% if you correct the mistake within two years by taking the missed distribution and filing Form 5329 with an explanation.
When do I need to start taking RMDs from an inherited IRA?
For most beneficiaries, the first RMD is due by December 31 of the year following the original owner’s death. Surviving spouses have additional flexibility and can delay until the year the deceased spouse would have turned 73.
Does the 10-year rule apply to inherited Roth IRAs?
Yes, non-eligible designated beneficiaries must empty inherited Roth IRAs within 10 years. However, no annual RMDs are required during the 10-year period because Roth IRA owners never have RMD requirements during their lifetime.
How do I calculate the RMD if I inherited an IRA before 2020?
If you inherited before 2020, you generally continue using the stretch method based on your life expectancy. Find your life expectancy factor for your age in the year after death in the updated 2022 tables, then reduce by 1.0 for each subsequent year.
What happens if the original IRA owner dies before taking their RMD for the year?
The year-of-death RMD must still be taken. As the beneficiary, you’re responsible for ensuring this distribution is made. It’s calculated based on what the owner would have been required to withdraw using the Uniform Lifetime Table and their age at death.
Can I aggregate RMDs from multiple inherited IRAs?
Unlike RMDs from your own IRAs, inherited IRA RMDs generally cannot be aggregated across accounts. You must calculate and take the RMD separately from each inherited IRA, with one exception: multiple inherited IRAs from the same decedent can be aggregated if they’re the same type (all traditional or all Roth).
Plan Your Inherited IRA Strategy Today!
Navigating inherited IRA rules requires careful attention to deadlines, calculations, and tax planning opportunities. Q3 Advisors can help you understand your specific RMD requirements, optimize distribution timing, and integrate inherited IRA planning into your overall financial strategy. To discuss your inherited IRA situation, schedule a consultation with our team.
