Most non-spouse beneficiaries lost decades of tax deferral when the SECURE Act replaced the old stretch method with a 10-year rule — this shows how much longer deferral used to last.
How it works
The old stretch method spread required distributions over a beneficiary’s full IRS life expectancy — decades for a young beneficiary. The current rule compresses the same balance into just 10 years, comparing average annual distributions under each.
What this does not include
This computes simple averages for comparison — the old stretch method actually used shrinking annual RMD factors (not a flat average), and the current 10-year rule may or may not require annual distributions during the window depending on whether the original owner had reached their required beginning date.
How to use this calculator
- Enter the inherited balance and the beneficiary’s stretch-method life expectancy.
Frequently asked questions
Who still gets to use the old stretch method?
Eligible designated beneficiaries — a surviving spouse, a minor child of the owner, a disabled or chronically ill beneficiary, or someone not more than 10 years younger than the owner.
Why does a younger beneficiary lose more under the new rule?
Because their stretch-method life expectancy was much longer than 10 years — the older the beneficiary, the closer their stretch life expectancy already was to 10 years, narrowing the practical difference.
Does the 10-year rule change the total tax paid?
Not necessarily the total, but it compresses when it’s paid — more income concentrated into fewer years often means higher marginal tax brackets than the same total spread over decades would have hit.
