Inherited Ira Calculator

Step-by-Step Guide to Using the Inherited IRA Calculator

The Inherited IRA Calculator is a valuable tool for beneficiaries of an inherited IRA. It helps you determine important aspects like the required minimum distributions (RMDs) and projected account values. Follow these steps to ensure accurate results:

Step 1: Enter Basic Information

• Current IRA Account Value ($): Enter the current value of the inherited IRA. Make sure the amount is a non-negative number, which is required for the calculation.
• Beneficiary’s Date of Birth: Select the birth date of the beneficiary using the date picker. This field is mandatory, and the date cannot exceed December 31, 2024.
• Original Owner’s Date of Death: Choose the date of death for the original owner of the IRA. This input is also required and must not be later than December 31, 2024.

Step 2: Define the Relationship

• Relationship to Original Owner: Select the appropriate relationship of the beneficiary to the original owner from the dropdown options: Spouse, Non-Spouse, Minor Child, or Chronically Ill/Disabled Individual. This information is crucial for determining the distribution timeframe and calculating RMDs.

Step 3: Input Expected Financial Details

• Expected Annual Return (%): Enter the expected annual return rate for the investments within the IRA. This field is mandatory, with values ranging from 0 to 100%.

Step 4: Review Calculated Results

After entering the necessary information, review the calculated fields:

• Distribution Timeframe (Years): This will display the timeframe over which distributions must occur, depending on the relationship to the original owner.
• Required Beginning Date: The calculator will display the date by which required minimum distributions must begin, typically one year after the original owner’s death.
• First Year RMD: View the required minimum distribution for the first year. This amount is calculated based on the account value and the relationship type.
• Projected Account Value (10 Years): The calculator will show the projected value of the account after ten years, assuming the expected annual return.
• Beneficiary Age at Inheritance: Check the calculated age of the beneficiary at the time of inheritance.

This step-by-step guide should help you effectively use the Inherited IRA Calculator to determine essential financial aspects of the inherited IRA. Always verify all entered values to ensure the accuracy of the results.