401(k) Calculators
Inherited 401(k) Beneficiary Calculator
The "stretch" is gone for most beneficiaries — but whether you owe annual withdrawals starting this year, or can wait until year 10, depends on one specific fact: how old the original owner was when they died.
Which rule applies to your inherited 401(k)?
Based on the SECURE Act and the July 2024 IRS final regulations.
About you and the account
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This determines which rule applies, not your exact annual RMD dollar amount — that's calculated using the IRS Single Life Expectancy Table based on your age, which a tax professional or plan administrator can compute precisely.
The stretch is dead for most people — but not everyone
Before 2020, most beneficiaries could "stretch" required withdrawals from an inherited 401(k) or IRA over their own life expectancy, sometimes drawing distributions out over 40 or 50 years while the rest kept growing tax-deferred. The SECURE Act ended that for most non-spouse beneficiaries inheriting from someone who died on or after January 1, 2020, replacing it with a hard 10-year deadline: the entire account must be emptied by December 31 of the 10th year after death.
The rule that was genuinely unsettled for four years
The genuine relief: no retroactive penalty for 2021-2024
Because the rule was unsettled, the IRS waived the 25% missed-RMD excise tax for anyone who should have taken annual distributions during 2021-2024 but didn't. That grace period ended with 2024 — if annual RMDs apply to your situation, you needed to resume or begin them for the 2025 distribution year, and that obligation continues every year through year 9.
Who escapes the 10-year rule entirely
| Beneficiary type | Rule that applies |
|---|---|
| Surviving spouse | Most flexible options, including rolling into their own IRA |
| Minor child of the deceased | Stretch until reaching majority, then the 10-year clock starts |
| Disabled or chronically ill beneficiary | Can stretch over their own life expectancy |
| Beneficiary less than 10 years younger than the deceased | Can stretch over their own life expectancy |
| Everyone else (adult children, other relatives, most trusts) | Subject to the 10-year rule |
These first four categories are called "eligible designated beneficiaries" (EDBs) — the only group that retains something resembling the old stretch option.
What most people get wrong
- No early withdrawal penalty applies, regardless of your age. Inherited retirement account distributions are never subject to the 10% early withdrawal penalty, even if you're 25 and inherit from a parent.
- Roth 401(k) inheritance still follows these rules. SECURE 2.0 removed lifetime RMDs for the original owner of a Roth 401(k), but a beneficiary who inherits one is still generally subject to the same 10-year rule (though the withdrawals themselves are typically tax-free, since they're Roth funds).
- Missing a required annual RMD now carries a 25% excise tax on the shortfall, reduced from 50% under the old rules — a real, serious cost if you assumed you could wait until year 10 when annual distributions were actually required.
The SECURE Act 10-year rule, the July 2024 IRS final regulations on annual RMDs, the 2021-2024 penalty waiver, and eligible designated beneficiary categories verified across multiple independent 2026 tax guides showing consistent detail. This tool identifies which rule applies to your situation; it does not calculate your precise annual RMD dollar amount, which requires the IRS Single Life Expectancy Table. This is general information, not tax advice — a tax professional can calculate your exact required distribution.
Frequently asked questions
Before you take a distribution from an inherited 401(k).
Do I have to empty an inherited 401(k) within 10 years?
Most non-spouse beneficiaries do, if the original owner died in 2020 or later. Surviving spouses and a narrow group of "eligible designated beneficiaries" are exempt from this rule.
Do I have to take withdrawals every year, or can I wait until year 10?
It depends on whether the original owner had reached their required beginning date (age 73) before death. If they had, you must take annual RMDs in years 1-9. If they hadn't, you can wait and withdraw everything at any point up to the year-10 deadline.
What happens if I missed an annual RMD from 2021-2024?
The IRS waived the penalty for those specific years due to genuine rule ambiguity. That waiver did not extend past 2024 - annual RMDs, where required, resumed for the 2025 distribution year.
Do I pay the 10% early withdrawal penalty on an inherited 401(k)?
No. Inherited retirement account distributions are never subject to the 10% early withdrawal penalty, regardless of your age.
Does the 10-year rule apply to inherited Roth 401(k) accounts?
Yes, generally the same 10-year rule applies to inherited Roth 401(k)s, though the withdrawals themselves are typically tax-free since they're Roth funds.