Beneficiary Required Minimum Distributions

This Beneficiary Required Minimum Distributions Calculator is designed to show the required minimum annual distributions from an inherited retirement account to a beneficiary, based on the beneficiary’s age. To use this tool you will need the account balance of the inherited account; the age at which the original account owner passed away; the age of the beneficiary at the end of the year the original account owner died; the beneficiary’s age at the time of distribution and the account’s annual rate of return. This calculator will take all of this information into consideration and create a chart of required minimum distributions by your age. You can also select to display the result by age or by required minimum distributions.

Beneficiary Required Minimum Distributions Calculator Overview

If you inherit a retirement plan from your spouse, a family member, or a close personal relation, then you will need to decide how you want to handle the management of the account.

In most cases you will want to first refer to the rules and regulations set out by the IRS regarding minimum distribution rates and alternative cash out possibilities. Your first option is to cash out the retirement account and pay taxes on a lump sum distribution. If you don’t want to cash out the account then you should hold off making distributions from the account until it is required by the IRS.

If you would like to examine when distributions will need to be made and how much you will need to withdraw as the beneficiary of a retirement account then you should use our Beneficiary Required Minimum Distributions calculator.

How to Use the Beneficiary Required Minimum Distributions Calculator

Follow these steps:

  1. Enter the account balance of the retirement account as of the end of the previous year
  2. Specify the age of the account owner at the time of their death
  3. Input the age of the account’s beneficiary as of December 31 in the year immediately following the account owner’s death
  4. Add the beneficiary’s age as of December 31 in the distribution year you are calculating
  5. Enter the estimated rate of return for the retirement account
  6. If applicable, check the box to indicate if you were the spouse of the original account owner and sole beneficiary
  7. Indicate if your birthday falls after June 30 of each year
  8. Indicate if the original account owner died after the date they were required to begin receiving distributions from the account
  9. Click “View Report” to see your result.

Who is this Calculator for?

This calculator is most useful if you:

  • Are the spouse or family member of a retirement account owner who has recently passed away
  • Stand to become a beneficiary of an inherited retirement account
  • Need to know the minimum distribution requirements of a retirement account you have inherited.

What is a required minimum distribution?

Most retirement account plans make it compulsory for you to begin taking withdrawals once you reach the age of 70.5 years. Conversely, the required minimum distribution is the minimum amount of money which you must withdraw from the retirement account every year.

What’s the difference if I am the account owner’s spouse?

Spouses of deceased retirement account owners follow slightly different rules to other beneficiaries. If you, the spouse, are the sole beneficiary or the account, then you gain the ability to treat the inherited account as your own. This allows you more flexibility and is typically the most sensible choice – this calculator assumes that you would take this option if it is available to you.