Required Minimum Distributions — RMDs — are mandatory annual withdrawals the IRS requires from most pre-tax retirement accounts once you reach a specified age. The rules changed significantly in December 2022.
What SECURE 2.0 Changed
The Consolidated Appropriations Act of 2023 — SECURE 2.0 — was signed on December 29, 2022. Section 107 increased the RMD starting age in two steps:
- §Age 72 → Age 73: Effective for individuals who turn 72 after December 31, 2022
- §Age 73 → Age 75: Scheduled for individuals who turn 74 after December 31, 2032
Which Accounts Are Subject to RMDs?
RMD rules apply to traditional IRAs, SEP IRAs, SIMPLE IRAs, 401(k), 403(b), and most 457(b) plans. Roth IRAs are not subject to RMDs during the account owner's lifetime. Starting in 2024, SECURE 2.0 extended this exemption to designated Roth accounts within 401(k) and 403(b) plans.
Your Required Beginning Date
The Required Beginning Date (RBD) is April 1 of the calendar year following the year you turn 73. Choosing to delay the first RMD until April 1 means two RMDs fall in the same calendar year — both taxable in that year.
How to Calculate an RMD
Per IRS Publication 590-B:
RMD = Account Balance as of December 31 of prior year ÷ Life Expectancy Factor
For most account owners, the IRS Uniform Lifetime Table applies. Selected factors:
| Age | Life Expectancy Factor |
|---|---|
| 73 | 26.5 |
| 75 | 24.6 |
| 80 | 20.2 |
| 85 | 16.0 |
| 90 | 12.2 |
Example: A 73-year-old with a December 31 prior-year balance of $500,000 calculates: $500,000 ÷ 26.5 = $18,868 as the RMD.
When you hold multiple traditional IRAs, calculate the RMD for each separately — then take the combined total from any one or combination of accounts.
Penalties for Missing an RMD
SECURE 2.0 reduced the excise tax for failing to take a required distribution from 50% to 25% of the amount not withdrawn. If corrected within a two-year window, the penalty drops to 10%.
Inherited IRA Rules: The 10-Year Rule
The original SECURE Act of 2019 changed how most non-spouse beneficiaries handle inherited accounts for owners who died after December 31, 2019. The 10-year rule requires most non-spouse beneficiaries to withdraw the entire balance within 10 years.
Eligible Designated Beneficiaries — including surviving spouses, minor children of the deceased, individuals with disabilities, and those not more than 10 years younger than the deceased — may use life expectancy-based distributions instead.
Surviving spouses may roll over an inherited IRA into their own IRA, deferring RMDs until their own Required Beginning Date.
Qualified Charitable Distributions (QCDs)
IRA owners age 70½ or older may make Qualified Charitable Distributions of up to $105,000 per year (2024, indexed for inflation) directly to a qualifying charity. A QCD satisfies the RMD requirement while excluding the distribution from taxable income.
IRS Publication 590-B is available at irs.gov and is updated annually.
Educational purposes only. Not financial, tax, or legal advice.