Inherited IRA / Stretch Rule

Non-spouse beneficiaries must drain inherited Traditional IRAs within 10 years (SECURE Act 2019). Compare withdrawal strategies — taking a little each year usually beats lump-summing, but the math depends on the heir's tax brackets.

📖 About this tool

What it does

Compares 4 strategies for draining an inherited Traditional IRA over the SECURE Act's 10-year window: equal annual, front-loaded, back-loaded, and lump-sum year 1. Models the heir's stacked income and progressive federal brackets to find the highest after-tax net.

Who this helps

Non-spouse heirs of Traditional IRA / 401(k) accounts. Spouses can roll over and skip the 10-year rule; everyone else (children, siblings, etc.) is subject to it.

How to use it

  1. Enter the inherited balance and expected return.
  2. Enter the heir's filing status and other annual income (wage / business / pension).
  3. Set the heir's state tax rate.
  4. Read the stat boxes for net to heir under each strategy and the recommended winner (★).
  5. Use the year-by-year table for the equal-distribution path's bracket impacts.

What it doesn't do

Doesn't model special exceptions (chronically ill, disabled, minor children of the decedent — these can still stretch). Doesn't apply to inherited Roth (no income tax, but still 10-year rule for non-spouse).

Inputs

The Inherited Account

Surviving spouse can roll into their own IRA and skip the 10-year rule. This tool assumes a non-spouse beneficiary subject to SECURE Act.

Heir's Tax Picture

Wage / business income that already takes up bracket headroom. Inherited withdrawals stack on top of this.

Strategy Comparison

Net to Heir (Total After Tax)
Year-by-Year (Equal Distribution)
YearStart BalanceGrowthWithdrawalMarginal BracketTaxNet to Heir