RMD Rules After SECURE 2.0
Required minimum distributions force money out of pre-tax retirement accounts on a schedule the IRS sets, not one you choose. SECURE 2.0 changed the starting age twice in seven years and cut the missed-RMD excise tax in half. Here is the rulebook as it stands for 2025.
When RMDs start
- Born 1950 or earlier: RMDs already in pay status (age 70½ or 72 depending on year of birth).
- Born 1951–1959: RMDs begin at age 73.
- Born 1960 or later: RMDs begin at age 75.
The starting age is governed by IRC §401(a)(9)(C), as amended by SECURE 2.0 §107. The first RMD can be delayed until April 1 of the year after you turn the trigger age, but doing so forces two RMDs in one calendar year — a common bracket-buster.
What's covered, what's not
RMDs apply to Traditional IRAs, SEP IRAs, SIMPLE IRAs, 401(k)s, 403(b)s, and governmental 457(b)s. Two notable exclusions:
- Roth IRAs never have lifetime RMDs.
- Roth 401(k)s and Roth 403(b)s are exempt starting in 2024 under SECURE 2.0 §325 — the old rule that forced Roth-account RMDs is gone.
If you are still working at age 73+ and own less than 5% of the employer, the "still-working exception" under §401(a)(9)(C)(i)(II) lets you defer RMDs from that specific 401(k) until retirement. It does not apply to IRAs.
How the RMD is calculated
The RMD equals your December 31 prior-year balance divided by a life-expectancy factor from the IRS Uniform Lifetime Table (Treas. Reg. §1.401(a)(9)-9). For most retirees the factor at age 73 is 26.5; at age 80, 20.2; at age 90, 12.2. The factor falls each year, which is why RMDs grow as a percentage of the account even when the balance is flat.
The excise tax for missed RMDs
Failing to take an RMD triggers an additional tax under IRC §4974. SECURE 2.0 §302 cut the rate from 50% to 25%, and to 10% if you take the missed distribution and file Form 5329 within a two-year correction window. Reasonable-cause waivers are routinely granted; file the form and ask.
Inherited IRAs after the SECURE Act
For deaths after December 31, 2019, most non-spouse beneficiaries must empty the inherited IRA within 10 years. The IRS confirmed in final regulations published July 19, 2024 (Treas. Reg. §1.401(a)(9)-5(d)) that annual RMDs are required during years 1–9 if the original owner had already begun RMDs. The IRS waived enforcement of those annual RMDs for 2021–2024 in a series of notices ending with Notice 2024-35; the requirement is fully effective starting in 2025.
Common mistakes
- Aggregating across account types. RMDs from multiple Traditional IRAs can be satisfied from any one of them. 401(k) RMDs must be taken plan by plan and cannot be satisfied from an IRA.
- Forgetting the first-year double-up. Deferring the first RMD to April 1 of year two stacks two distributions into one tax year. Often worse than just taking it on time.
- Missing the QCD opportunity. A Qualified Charitable Distribution (age 70½+, up to $108,000 in 2025) satisfies the RMD without adding to taxable income. Useful for retirees who give regularly anyway.
Sources
- Internal Revenue Code §401(a)(9), required distributions (Cornell LII): law.cornell.edu/uscode/text/26/401
- Final RMD regulations under SECURE and SECURE 2.0, published July 19, 2024: federalregister.gov/documents/2024/07/19/2024-14542
- IRS Notice 2024-35, waiver of 2024 RMDs for certain inherited IRA beneficiaries: irs.gov/pub/irs-drop/n-24-35.pdf
- IRS Publication 590-B, Distributions from IRAs: irs.gov/forms-pubs/about-publication-590-b
- SECURE 2.0 Act of 2022, §§107, 302, 325 — Division T of Pub. L. 117-328: congress.gov/bill/117th-congress/house-bill/2617
- Internal Revenue Code §4974, excise tax on missed RMDs: law.cornell.edu/uscode/text/26/4974
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