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The basics
Select the inherited account kind on its investment card, assign its owner, and choose its distribution method. For an account already held, the forecast starts its remaining clock in the first plan year. A future inheritance starts the clock when that account arrives.
Enter the years remaining for your situation, rather than assuming a newly entered balance always has a fresh ten years.
Illustrative numbers
Compare two modeled schedules
Inherited balance$100,000
Years remaining10
Spread mode, first required withdrawal$10,000
Deadline mode, first-year forced withdrawal$0
Deadline mode can still allow the funding system to withdraw money earlier if needed. Whatever remains is forced out in the final year of its clock.
Calculation transparency
How it works in MoneyWhatIf
- 01
Spread mode divides the balance by the remaining years. Deadline mode forces the remainder out in the final year. RMD mode adds annual life-expectancy minimums before that deadline.
- 02
Stretch mode uses life-expectancy minimums without the deadline. Life-expectancy modes use the modeled beneficiary’s starting age and reduce the initial factor as years pass.
- 03
Inherited pre-tax distributions are modeled as ordinary income; inherited Roth follows its tax-free withdrawal treatment. Inherited kinds do not receive an early-withdrawal charge.
- 04
Required distributions occur even if spending does not need them. Unused cash then follows the plan’s cash-flow priorities.
Keep in mind
Model limits
The account’s distribution choice is your input. The app does not determine which beneficiary rules you qualify for or verify the original owner’s death date.
Successor-beneficiary rules are simplified: a later spousal transfer can re-anchor the life-expectancy factor instead of preserving every inherited-account deadline rule.
This explanation documents the planning model. It is educational, not individualized tax, legal, Medicare, or investment advice.
Where it appears
Where to use it
See this concept in context, with a guide to each page and its controls.
The words behind it
Related financial terms
Plain-English definitions, with 2026 figures and worked examples, from the financial terms glossary.