Required Minimum Distribution Calculations for IRA Beneficiaries

Calculating your required minimum distribution can be complicated.

hands on account image by TEMISTOCLE LUCARELLI from

If you have an individual retirement account, you'll eventually have to take at least some money out of it. This holds true if you inherit an IRA as well. However, the rules are different when you inherit an IRA as a spousal or non-spousal beneficiary. Either way, the Internal Revenue Service calculates your minimum distribution based on a combination of life expectancy and account value.

Spousal Beneficiaries

If you are the spouse of the decedent, you can convert his IRA into your own. This makes the required minimum distribution calculation much more straightforward, as it is based on your life expectancy alone. Divide the account value at the end of the year by your life expectancy; the result is the amount of your distribution. Your life expectancy is based on the tables provided by the IRS in Appendix C of Publication 590. Your first distribution is not due until April 1 of the year after you turn age 70-1/2.

Non-Spousal Beneficiary Option One

If the original account owner had already begun taking his own required distributions at the time of his death, your options as a non-spousal beneficiary are limited. The general rule is that you must continue to take distributions from the IRA at least as rapidly as the owner's original schedule. However, if the owner was recalculating his life expectancy every year, or if he was using his own single life expectancy, you can recalculate the distributions based on your own life expectancy. This is generally more advantageous if you are younger than the decedent, as you can spread the distributions over a longer time period.

Non-Spousal Beneficiary Option Two

If the original account owner had not yet begun taking required distributions, you can extend your distributions over your life expectancy. However, you must take your first distribution by the end of the year following the owner's death, and you must elect to take distributions over your life expectancy. If you fail either of these requirements, you must withdraw the entire IRA balance within the five years after the owner's death.


If you don't take money out of your inherited IRA in accordance with IRS instructions, you face a severe penalty of 50 percent of the amount you should have withdrawn. The penalty will be assessed annually until you take the required distribution. The good news is that the 10 percent penalty the IRS typically levies on withdrawals before age 59-1/2 does not apply to the required distributions from an inherited IRA.