How to Calculate the RMD of an Inherited IRA

When someone close to you passes on, a bequest of any kind can be a poignant reminder of the decedent's thought and care. An IRA can be an especially kind bequest because the money that remains in the account even as you withdraw yearly amounts -- Internal Revenue Service required minimum distributions -- can continue to earn interest. Although your IRA trustee may distribute the yearly RMD, it's a good idea to learn how to calculate the amount. That way, you can get an idea of how long the account will last and how much you are likely to receive from it.

Step 1

Determine the balance of the IRA as of the end of the previous year. This information is available from your online or printed statement. You may also be able to get the figure by phone from your trustee. For example purposes, the balance is $500,000.

Step 2

Look up the IRS Single Life Expectancy Table figure that corresponds to your age. For example, if you are age 32 when you inherit the IRA, the relevant figure on the table is 51.4. (The IRS estimates that you will live for 51.4 more years -- enjoy them while you can.)

Step 3

Divide the IRA balance by the age-related life expectancy figure. In our example, $500,000 divided by 51.4 equals $9,727, the RMD for the year.

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