Beneficiary Required Minimum Distributions (RMD)

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. The spouse is the only beneficiary of the account
3. The beneficiary isn't a non-spouse Designated Eligible Beneficiary
4. The beneficiary is a non-spouse Designated Eligible Beneficiary but chose to use the standard RMD method.

This calculator is not designed for the additional RMD options are available to non-spouse Designated Eligible Beneficiaries for years 2020 and after. However, non-spouse Eligible Designated Beneficiaries can choose to use the standard RMD calculations. Using the additional RMD options available to them is a choice made when the account is inherited it is not a requirement. Non-spouse Eligible Designated Beneficiaries include a child of the account owner that is under age 21 or are permanently disabled or are chronically ill. A child, once they reach 21, is no longer considered an Eligible Designated Beneficiary and the 10-year distribution rule will apply starting in the year they turn 21. For more information please see Modification of Required Distribution Rules for Designated Beneficiaries.

IMPORTANT! This calculator has been updated for SECURE 2.0 of 2022, the SECURE Act of 2019, the CARES Act of 2020 and IRS Notices through December 31^st, 2023. Future IRS notices, updated rules and procedures may have an impact on enforcement and interpretation of these Acts and notices.

Life expectancy calculations

The SECURE Act of 2019 new RMD rules are used when an account owner dies after 12/31/2019. The pre-SECURE Act rules apply for account owners who died on or before 12/31/2019.

The pre-SECURE Act RMD calculations are used if the beneficiary is 10 or less years younger than the original account owner or an if the beneficiary is classified as an Eligible Designated Beneficiaries.

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 75 (or 70 1/2 if you were born before 7/1/1949, 72 if you were born 7/1/1949 to 12/31/1951, 73 if you were born 1/1/1951 to 1/1/1960). This calculator assumes that a spouse will wish to treat an inherited IRA as their own.

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.

A proposed rule for the SECURE Act was released on February 23, 2022. When finalized the new rule will change the way the RMDs are treated for non-spouse Designated Beneficiaries that use the SECURE Act 10-year rule for distributions. Originally the required distributions under the 10-year rule required all funds to be withdrawn by the end of the year following the 10th anniversary of the account owner's death without regard to RMDs.

The proposed rule requires a beneficiary to withdraw an RMD for year 1 through 9 if the original account owner had already begun taking RMDs themselves. The remainder would then be required to be withdrawn in its entirety in year 10. This calculator follows the proposed rule with RMDs for year 1 through 9 if the account owner had required distributions before their death. All remaining funds are then required to be withdrawn in year 10. However, IRS Notice 2023-54 eliminated the penalties for not taking this RMD in 2020 through 2023. It is strongly advised you seek professional guidance in all RMDs and especially with beneficiary RMDs.

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.

Amount Subject to RMD

This is the fair market value of your account as of the close of business on December 31^st of the prior 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 31^st 2023, had an annual compounded rate of return of 15.2%, including reinvestment of dividends. From January 1, 1970 to December 31^st 2023, the average annual compounded rate of return for the S&P 500®, including reinvestment of dividends, was approximately 10.9% (source: www.spglobal.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. 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. The calculator will only apply this rule to non-spouse beneficiaries, for spousal beneficiaries it is assumed they will treat the account as their own.

Beneficiary birthdate

Enter the beneficiary's birthdate. For spousal beneficiaries this is used to lookup your annual life expectancy each year an RMD occurs. For non-spousal RMDs that began in 2019 or earlier (they are not subject to the SECURE Act changes) this is used 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 75 (or 70 1/2 if you were born before 7/1/1949, 72 if you were born 7/1/1949 to 12/31/1951, 73 if you were born 1/1/1951 to 1/1/1960).