Inherited Roth IRA RMD Calculator

Determine the best way to take distributions from an inherited Roth IRA. This calculator helps you understand the 10-year rule, compare different withdrawal strategies, and see how to maximize tax-free growth as a beneficiary. Enter the account details to see your distribution deadline and model even, deferred, and front-loaded withdrawal plans.

This tool is for anyone who has inherited a Roth IRA, especially non-spouse beneficiaries subject to the 10-year rule. Whether you are a spouse weighing your options or a non-spouse needing a clear plan, this calculator provides clarity. For traditional IRAs, use the general Inherited IRA Calculator. For understanding your own retirement accounts, see the Roth IRA Calculator or the main RMD Calculator for your own future distributions.

The results show a distribution strategy score, your optimal strategy based on income, the years remaining to empty the account, and your total potential tax-free distributions. A detailed chart visualizes how the account balance changes over time with different withdrawal approaches, helping you make an informed decision.

Start with the essential details of the account you inherited. In the "Inherited Roth IRA Details" section, enter the current Inherited Roth IRA Balance and the Year Inherited. The year of inheritance is crucial as it sets the clock for the 10-year distribution rule.

Next, provide your information under "Beneficiary Information." Enter Your Age and your Relationship to Decedent. The relationship is a key factor in determining which rules apply. For example, a non-spouse beneficiary typically follows the 10-year rule, while a spouse has more flexible options.

Then, under "Growth Assumptions," enter an Expected Annual Return. This is the average investment return you anticipate for the funds while they remain in the inherited Roth IRA. A higher return will increase the potential for tax-free growth.

For a more detailed analysis, open the advanced settings. Here you can specify if the 5-Year Rule Met. This rule determines if earnings can be withdrawn tax-free. You can also enter your Other Annual Income, which the calculator uses to suggest an optimal withdrawal strategy based on your financial situation.

Inherited Roth IRA Balance & Year Inherited

The Inherited Roth IRA Balance is the current market value of the account. This is the starting point for all projections. The Year Inherited is the year the original account owner passed away. This date is critical because it starts the 10-year countdown for most non-spouse beneficiaries.

Your Age & Relationship to Decedent

Your Age is used for context but is most important for "Eligible Designated Beneficiaries" who may be able to take distributions over their life expectancy. The Relationship to Decedent is the most important input for determining your withdrawal requirements.

• Spouse: Has the most flexibility, including the option to treat the IRA as their own.
• Non-Spouse: Typically subject to the 10-year rule. This includes adult children, siblings, or other relatives.
• Minor Child: An "Eligible Designated Beneficiary" (EDB) who can take RMDs based on their life expectancy until they reach the age of majority (usually 21), at which point the 10-year rule begins.
• Disabled/Chronically Ill: Also an EDB, this person can "stretch" distributions over their own life expectancy, avoiding the 10-year rule.

Expected Annual Return

This is your estimate of the average annual investment growth for the inherited Roth IRA. This rate directly impacts how much the account can grow tax-free before you are required to fully distribute it. A conservative estimate is often wise for planning purposes.

5-Year Rule Met

This advanced setting asks whether the original account owner had first funded any Roth IRA at least five years before your distributions begin. If the 5-year rule is met, all distributions, including earnings, are tax-free. If not, contributions are still tax-free, but earnings may be taxable until the five-year clock is satisfied. The clock does not restart for the beneficiary. For more details, see our Roth IRA Calculator.

Other Annual Income

Your other income helps the calculator determine a suggested "optimal" strategy. For example, someone with low other income might benefit from deferring distributions to maximize tax-free growth, while someone with high income might not have a specific advantage to any one timing strategy since Roth distributions are tax-free anyway.

The calculator models your inherited Roth IRA's future based on the rules established by the SECURE Act. Its primary function is to compare withdrawal strategies for beneficiaries subject to the 10-year rule.

First, the calculator determines your distribution timeline. For most non-spouse beneficiaries, this is 10 years following the year of the original owner's death. For spouses or Eligible Designated Beneficiaries (EDBs), it recognizes that a "stretch" or rollover is possible, extending the timeline.

Next, it projects the account's growth from the year of inheritance to the present day using your Expected Annual Return. This establishes an accurate starting balance for the projection.

The core of the calculation involves modeling three distinct withdrawal strategies over the remaining years of the distribution period:

1. Even Distribution: Divides the remaining balance by the number of years left, creating a relatively consistent annual withdrawal.
2. Deferred Distribution: Assumes you take no withdrawals until the final years of the 10-year window, maximizing the time for tax-free compounding. The final distribution is a lump sum of the entire remaining balance.
3. Front-Loaded Distribution: Assumes you withdraw a larger portion of the funds in the early years.

For each year and each strategy, the calculator deducts the withdrawal and then applies the annual investment return to the remaining balance. The results are displayed in a chart, allowing you to visually compare how each strategy impacts the account's value over time. Finally, it generates a "Distribution Strategy Score" based on your flexibility, including years remaining, whether the 5-year rule is met, and the potential for growth.

This calculator uses a year-by-year projection to model different scenarios. The key formulas are outlined below.

Timeline and Growth Calculation

The calculator first establishes the timeline and grows the initial balance to its current value.

Deadline Year = Year Inherited + 10
Years Remaining = Deadline Year - Current Year
Years Since Inheritance = Current Year - Year Inherited
Current Balance = Inherited Balance at time of death * (1 + Expected Annual Return) ^ Years Since Inheritance

Withdrawal Strategy Formulas

For each year in the projection, the calculator calculates the withdrawal amount for three different strategies. Below is a simplified representation of the logic.

// Strategy 1: Even Distribution
Even Withdrawal = Current Balance for Strategy / Years Remaining in Period

// Strategy 2: Deferred Distribution
Deferred Withdrawal = 0 (until near the end of the period, then withdraw remaining balance)

// Strategy 3: Front-Loaded Distribution
Front-Loaded Withdrawal = (Current Balance for Strategy / Years Remaining) * (a factor > 1)

After each withdrawal, the remaining balance for that strategy grows for one year.

Next Year's Balance = (Current Year's Balance - This Year's Withdrawal) * (1 + Expected Annual Return)

This process repeats for each year until the end of the distribution period, when the final balance is withdrawn.

The SECURE Act of 2019 significantly changed the rules for most beneficiaries of inherited retirement accounts, including Roth IRAs. The most impactful change was the introduction of the "10-year rule" for most non-spouse beneficiaries.

This rule requires the beneficiary to withdraw the entire balance of the inherited account by the end of the 10th year following the year of the original owner's death. For example, if the owner died in 2024, the account must be empty by December 31, 2034.

A crucial distinction for inherited Roth IRAs is that, unlike inherited traditional IRAs, there are no annual Required Minimum Distributions (RMDs) during the 10-year period. This gives you complete flexibility. You can take money out periodically, all at once, or wait until the final year to take a lump-sum distribution. This flexibility is what our calculator helps you model. The penalty for failing to empty the account by the deadline is severe: a 25% tax on the amount that should have been withdrawn, which can be reduced to 10% if corrected promptly.

The rules for inheriting a Roth IRA depend heavily on your relationship to the deceased.

Spousal Beneficiaries: A surviving spouse has the most options:

1. Treat it as Your Own: You can roll the inherited Roth IRA into your own new or existing Roth IRA. This is often the best choice. Once rolled over, the account is treated as if it were always yours, meaning no RMDs are required during your lifetime.
2. Remain a Beneficiary: You can keep the IRA as an inherited account. If you do this, you must begin taking distributions based on your life expectancy or deplete the account within 10 years, depending on the decedent's age. Most spouses choose the rollover option for its simplicity and lack of RMDs.

Non-Spouse Beneficiaries: Most non-spouse beneficiaries, such as adult children, siblings, or partners, fall under the 10-year rule described above. However, a special category called Eligible Designated Beneficiaries (EDBs) can follow different rules. EDBs include:

• A minor child of the account owner (until age 21)
• A disabled or chronically ill individual
• An individual not more than 10 years younger than the decedent

These EDBs can "stretch" distributions over their own life expectancy, allowing the account to continue growing tax-free for much longer. Use our main RMD Calculator to estimate these life-expectancy payments.

For a Roth IRA distribution to be completely tax-free, it must be "qualified." This requires two conditions: the owner must be over age 59½ (or meet other criteria like disability), and a 5-year holding period must be met.

When you inherit a Roth IRA, this 5-year rule still applies, but with a key nuance: the clock starts when the original owner first contributed to any Roth IRA. It does not restart for you, the beneficiary.

• If the 5-Year Rule is Met: The original owner had a Roth IRA open for at least five years. All your distributions, including contributions and earnings, will be completely tax-free.
• If the 5-Year Rule is Not Met: The original owner opened their first Roth IRA less than five years ago. You can still withdraw their original contributions tax-free at any time. However, any investment earnings you withdraw will be subject to ordinary income tax until the five-year mark is reached.

This calculator helps you see the potential tax-free amount based on whether this rule has been satisfied.

• Distribution Strategy Score: This score, from 1 to 100, measures your overall flexibility. A high score indicates you have a long time remaining, the 5-year rule is met, and there is good growth potential. A low score suggests you have limited time and must act soon to meet the deadline.
• Optimal Strategy: Based on your other income, the calculator suggests a strategy. "Deferred" is often suggested for lower incomes to maximize tax-free growth, while "Even" provides steady income without tax consequences.
• Years Remaining: This shows how many years you have left to fully distribute the account under the 10-year rule.
• Tax-Free Amount: This is the total estimated amount you can withdraw tax-free. If the 5-year rule is met, this will equal the total distributions. If not, it may be lower.
• Balance Over Time Chart: This is the core visual result. It shows three lines representing the account balance under the Even, Deferred, and Front-Loaded withdrawal strategies. Use this to see how waiting to withdraw (Deferred, blue line) allows for the most growth, while taking money out sooner (Front-Loaded, orange line) depletes the account faster.

• Maximize Tax-Free Growth: If you don't need the inherited funds for immediate expenses, the "Deferred" strategy is often best. By leaving the money in the Roth IRA for as long as possible within the 10-year window, you allow it to compound completely tax-free.
• Create a Tax-Free Income Stream: If you want supplemental income, the "Even Distribution" strategy provides a predictable, tax-free cash flow over the 10-year period. Since the distributions are tax-free (assuming the 5-year rule is met), they won't push you into a higher tax bracket.
• Coordinate with Life Events: Plan your withdrawals around your financial needs. You could take a larger distribution to pay for a major expense like a home down payment or a child's education, all without tax penalties.
• Spouses Should Almost Always Roll Over: For spousal beneficiaries, rolling the inherited Roth IRA into your own is typically the superior choice. It simplifies your finances and eliminates any required distributions during your lifetime, giving the funds unlimited time to grow tax-free. Use the Roth IRA Conversion Calculator to explore related strategies for your own accounts.

1. Missing the 10-Year Deadline: Failing to empty the account by the end of the 10th year after death results in a 25% penalty tax on the remaining balance. This is the most costly mistake.
2. Assuming Annual RMDs Are Required: Many beneficiaries confuse the rules for inherited traditional IRAs with Roth IRAs. For a Roth IRA under the 10-year rule, there are no annual RMDs, providing full withdrawal flexibility.
3. Misunderstanding the 5-Year Rule: Withdrawing earnings before the original owner's 5-year clock is up can trigger unnecessary income taxes. Always verify when the first Roth IRA was opened.
4. Forgetting to Name a Successor Beneficiary: If you inherit an IRA, you should name your own beneficiary for that account. This ensures any remaining funds can pass to your heirs according to your wishes.
5. A Spouse Unnecessarily Taking Distributions: A spouse who remains a beneficiary instead of rolling the account over may take distributions they don't need, forgoing decades of potential tax-free growth.