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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'.
By changing any value in the following form fields, calculated values are immediately provided for displayed output values. Click the view report button to see all of your results.
Your current Required Minimum Distribution is $3,649.64
Updated for the SECURE Act and CARES Act
*indicates required.
Age 71 as of 12/31 year of death
Age 72 as of 12/31/2024
Check here if original account owner was your spouse.
Distributions by Age of Beneficiary Column Graph: Please use the calculator's report to see detailed calculation results in tabular form.
Account Balance by Age of Beneficiary Line Graph: Please use the calculator's report to see detailed calculation results in tabular form.

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.

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 SECURE 2.0 of 2022, the SECURE Act of 2019 and the CARES Act of 2020. Future IRS published procedures may have an impact on enforcement and interpretation of these Acts.

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. It is likely this new rule will be retroactive to all of 2022. Originally the required distributions under the 10-year rule required all funds to be withdrawn end of the year in which includes 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. Note that year's 1 through 9 have a required minimum distribution, any amount over the minimum is acceptable and will not incur penalties.

As of 9/30/2022 the proposed rule has not been finalized. Our current calculator illustrates evenly distributing distributions over a 10-year period when the 10-year rule applies. This will exceed the RMD requirement in all but a few circumstances. The RMD may not be sufficient if the applicable remaining life expectancy of the beneficiary is less than 10 years. It is strongly advised you seek professional guidance in all RMDs and especially with beneficiary RMDs.

Life expectancy calculations

The SECURE Act of 2019 new RMD rules are used when an account owner dies after 12/31/2019. The SECURE Act gives most non-spousal beneficiaries until 12/31 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 allowed withdrawal period.

The pre-SECURE Act rules apply for account owners who died on or before 12/31/2019. 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.

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. 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.

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 age 75 (or 70 1/2 born before 7/1/1949, 72 born before 1/1/1951, 73 born before 1/1/1960). 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.

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 2022, had an annual compounded rate of return of 12.6%, including reinvestment of dividends. From January 1, 1970 to December 31st 2022, the average annual compounded rate of return for the S&P 500®, including reinvestment of dividends, was approximately 10.7% (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. We only apply this rule to non-spouse beneficiaries, for spousal beneficiaries we assume they will treat the account as their own.

Beneficiary birthdate

Enter the beneficiary's birth date. 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) 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 75 (or 70 1/2 if you were born before 7/1/1949, 72 if your were born before 1/1/1951, 73 if you were born before 1/1/1960).



Transamerica Retirement Solutions
440 Mamaroneck Ave
Harrison, NY 10528

Information and interactive calculators are made available to you only as self-help tools for your independent use and are not intended to provide investment or tax advice. We cannot and do not guarantee their applicability or accuracy in regards to your individual circumstances. All examples are hypothetical and are for illustrative purposes. We encourage you to seek personalized advice from qualified professionals regarding all personal finance issues.