SECURE Act 2.0 May Change Your RMD Age
In 2019, the Setting Every Community Up for Retirement Enhancement (SECURE) Act raised the age for taking Required Minimum Distributions (RMDs). Now, the Secure Act 2.0 of 2022, passed in December, raises the RMD age once again to age 73 for some and age 75 for all others.
Here’s how this change may impact you:
- If you’ve already been taking RMDs, there is no change.
- If you turn age 72 in 2023 and were expecting to start taking RMDs, you are not required to make a distribution—you’ll start when you turn age 73! In fact, for those born in 1951 to 1959, your RMD starting age is 73.
- For those born in 1960 and later, your RMD starting age is 75.
Keep in mind that these are the distributions required by the government (so they can get those taxes from you!), but you can withdraw from your tax-deferred accounts earlier should you need to use these funds for living expenses or other spending. However, if you don’t need these funds now, this delay allows your account more time to grow.
The higher age for RMDs can allow you to strategize where you’ll take funds for your goals and expenses in the most tax-efficient way, and at the very least, allow you to keep your assets growing in these tax-deferred accounts just a little longer!