Beneficiary Required Minimum Distribution (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.

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Definitions

Account balance: This is the fair market value of your account as of the close of business on December 31st of the preceding year.
Beneficiary age as of 12/31 of distribution year: This is the beneficiary's age as of December 31st of the distribution year.
Beneficiary age as of 12/31 of the year following the owner's death: This is the age of the beneficiary as of December 31st of the year following the account owner's death. For example, if the account owner died in March of 1999, you would need to enter the beneficiary's age as of December 31, 2000.
Rate of return: 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 dependant on the type of investments you select. For example, from January 1970 to February 2003, the average compounded rate of return for the S&P 500, including reinvestment of dividends, was approximately 11%. Savings accounts at a bank pay as little as 1% or less. It is important to remember that future rates of return can't be predicted with certainty and that investments that pay higher rates of return are 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.
Was account owner your 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 70 ½.