What’s new with RMDs these days?

Below are some of the following pertinent changes to RMDs that were the result of the passing of the SECURE Act 2.0

RMD Age Extension
The age for RMDs was increased to 73 — Your first RMD must be taken by April 1 of the year you turn 73, and by December 31 each following year. Then, starting in 2033, SECURE 2.0 again pushes the age at which RMDs must start to 75.

Reduced Penalty
Under the old rules, if a retiree missed the RMD deadline, they would incur a penalty of 50% of the amount not taken on time. That penalty has been reduced in SECURE 2.0 to 25%, and in some cases, 10% if corrected within two years.

Pre-death Requirement Eliminated
Beginning in 2024, the pre-death requirement to take minimum distributions for Roth 401(k) accounts will be eliminated. This aligns with the treatment of RMDs for Roth IRA accounts, which don’t require distributions during one’s lifetime.

If you have any questions, don’t hesitate to reach out to our office at 815-842-4393.