The inherited account
Your own income
Enter the balance and your income, then click Plan.
Result
| Plan | After-tax wealth at end of window | Federal tax, today's dollars | Federal tax, total |
|---|
Recommended plan, year by year
| Year | Other income | Required minimum | Withdraw | Tax on it | Marginal rate |
|---|
What this does not cover
- Non-spouse beneficiaries on the 10-year rule only. Spouses, minor children of the owner, disabled or chronically ill beneficiaries and those within 10 years of the owner's age follow other rules.
- Federal ordinary income tax only, 2026 brackets and the standard deduction held constant. State tax, the 3.8% net investment income tax, Medicare IRMAA, Social Security taxation, credits and AMT are not modelled.
- The life-expectancy factor is approximate unless you enter the exact one from IRS Publication 590-B Table I.
- Growth is a single steady rate, and after-tax proceeds are assumed to earn the same rate. Real markets are not steady.
Common questions
Do I have to take money out of an inherited IRA every year?
It depends on when the original owner died. If they had already started required minimum distributions (reached their required beginning date), you must take a yearly minimum in years 1 to 9 and empty the account by the end of year 10. If they had not, you can take nothing until the end of year 10, though that is rarely the lowest-tax choice.
What is the 10-year rule for inherited IRAs?
Most non-spouse beneficiaries must empty an inherited IRA by December 31 of the tenth year after the owner's death. Spouses, minor children of the owner, disabled or chronically ill beneficiaries and people not more than 10 years younger than the owner are exceptions with different rules.
What is the best way to withdraw from an inherited IRA over 10 years?
Because tax brackets rise with income, the cheapest plan equalises your marginal rate across the years: take more in low-income years and less in high-income years, instead of all at the end. This calculator fills the lowest brackets in every year first and shows the after-tax difference against waiting and against equal withdrawals.
What is the penalty for missing an inherited IRA withdrawal?
A 25% excise tax on the amount you should have taken, reduced to 10% if you correct it within two years. It applies only to the yearly minimums when they are required, not to a plan that simply waits until year 10 when the owner died before their required beginning date.
Is this tax advice?
No. It applies published 2026 federal brackets to the numbers you enter and ignores state tax, the net investment income tax, Medicare IRMAA, Social Security taxation and credits. Check the plan with a qualified tax professional or the IRS Publication 590-B tables before you act.