Inherited IRA 10-Year Rule & SECURE 2.0 Tax Bracket Distribution Simulator
Optimize distributions from an Inherited Traditional vs Roth IRA under SECURE 2.0 rules: model annual RMD mandates and level withdrawals to avoid bumping into higher tax brackets.
Simulation Parameters
Calculated Strategic Output
Instant client-side calculation with zero data retention.
What this calculator does
This simulator helps non-eligible designated beneficiaries plan their distributions from an inherited IRA under the SECURE 2.0 Act 10-year rule. When you inherit a traditional IRA, forced distributions can significantly bump up your taxable income. The tool allows you to input your inherited account's primary value and an estimated tax or comparison rate to project the tax impact of withdrawing funds. It helps you visualize a distribution strategy to balance Required Minimum Distributions (RMDs) while avoiding unnecessary spikes into higher tax brackets over the mandated 10-year period.
How the math works
The calculator uses a straightforward projection based on your inputs. It takes your inherited IRA's Primary Value and multiplies it by your expected Tax / Comparison Rate to output the Total Estimated Benefit or estimated tax liability (depending on your comparison scenario). For example, if you input a marginal tax bracket, it calculates the raw tax hit of a lump-sum withdrawal.
This logic reflects the tax consequences dictated by the SECURE Act and SECURE 2.0 Act. According to the IRS, non-eligible designated beneficiaries must fully deplete the inherited account by December 31 of the 10th year following the original owner's death. If the owner died after their Required Beginning Date, annual RMDs (based on IRS Publication 590-B) are also required in years 1 through 9. This calculator assumes a base 2026 tax year scenario for testing bracket impact.
Worked example
Suppose you inherited a Traditional IRA and want to evaluate the tax impact of drawing down a large portion this year.
- You input a Primary Value of $75,000 to represent a scheduled withdrawal.
- You anticipate this withdrawal falls into the 24% marginal tax bracket, so you input a Tax / Comparison Rate of 24%.
- The calculator multiplies $75,000 by 0.24 (24 / 100).
- The output is $18,000.00, representing the estimated federal tax liability on that specific withdrawal amount.
By adjusting the primary value to simulate level annual withdrawals over the 10-year window, you can compare the tax cost against a single lump-sum distribution. For more retirement planning, check out our 401(k) Employer Match Calculator or the Solo 401(k) vs SEP IRA Calculator.
Frequently Asked Questions
Do I have to take annual RMDs under the 10-year rule?
If the original owner died on or after their Required Beginning Date, you must take annual RMDs in years 1–9 and empty the account in year 10. If they died before their Required Beginning Date, no annual RMDs are required, but the account must still be empty by the end of year 10.
What happens if I miss the 10-year deadline?
Failing to withdraw the required amounts can trigger a steep IRS excise tax. The penalty is typically 25% of the amount that should have been distributed, though it may be reduced to 10% if corrected in a timely manner.
Does the 10-year rule apply to Inherited Roth IRAs?
Yes. While Roth IRA distributions are generally tax-free, non-eligible designated beneficiaries must still empty an inherited Roth IRA within the 10-year window. However, because Roth IRAs do not have RMDs during the original owner's lifetime, annual RMDs in years 1–9 are not required.