SECURE 2.0 Changed RMD Rules — Here's What's Different and What It Means for You

The rules governing Required Minimum Distributions — the mandatory annual withdrawals the IRS requires from most retirement accounts — have changed more in the last five years than in the previous three decades. The SECURE Act of 2019 moved the starting age from 70½ to 72. The SECURE 2.0 Act of 2022 moved it again, cut the penalty for missed distributions, and eliminated RMDs from workplace Roth accounts entirely. If you're relying on advice you received before 2023, some of it is no longer accurate.

Change 1: The Starting Age Moved — Again

For Americans born between 1951 and 1959, RMDs now begin at age 73 — not 70½ or 72. For those born in 1960 or later, the starting age will eventually reach 75, though that change doesn't take effect until 2033. There was a brief period of confusion for those born in 1959, who technically sat at the boundary between the age-73 and age-75 rules. The IRS resolved this in 2024: people born in 1959 use age 73 as their starting point. For anyone approaching their late 60s or early 70s, the practical effect is a longer gap between retirement and mandatory distributions — which creates a planning opportunity. More on that below. Born RMD Begins At What This Means 1949 or before 70½ Already in RMD years or past starting age July 1949 Dec 1950 72 Already in or approaching RMD years 1951 1959 73 Current rules under SECURE 2.0 1960 or later 75 Effective 2033 — more planning time ahead

Change 2: The Penalty Was Cut Significantly

Missing an RMD used to carry a 50% excise tax — one of the harshest penalties in the entire tax code. SECURE 2.0 reduced that to 25%, effective for tax years beginning after December 29, 2022. More importantly, the law introduced a correction window. If you missed an RMD and you fix the error within that window — generally by the end of the second taxable year after the missed distribution — the penalty drops further to 10%. You would still owe the income tax on the distribution, but the penalty itself is substantially lower than it once was. To request the lower penalty or a full waiver based on reasonable error, you file Form 5329 with your tax return and include a letter explaining the mistake and the steps you took to correct it. The IRS has historically been willing to waive the penalty entirely for first-time errors with a clear explanation. This doesn't mean missed RMDs are consequence-free. On a $40,000 missed RMD, even the 10% corrected rate means a $4,000 penalty on top of the income tax. But the change does remove the catastrophic nature of what was previously a 50% hit.

Change 3: Roth 401(k) Accounts No Longer Have Lifetime RMDs

Before 2024, Roth 401(k) and Roth 403(b) accounts — the Roth versions of employer-sponsored retirement plans — had the same RMD requirements as traditional 401(k)s. That meant you were forced to take distributions from accounts whose withdrawals were already tax-free, which made no planning sense. SECURE 2.0 fixed this. Effective January 1, 2024, designated Roth accounts in employer plans are no longer subject to RMDs during the account owner's lifetime. They now function the same way as a Roth IRA — no mandatory distributions, ever. For people with significant Roth 401(k) balances, this is a meaningful change. There's no longer a reason to roll a Roth 401(k) into a Roth IRA just to escape RMDs. The workplace account itself is now free of that requirement.

The Still-Working Exception

One RMD rule that didn't change in SECURE 2.0 but is worth knowing: if you're still employed past your RMD start age, you may be able to delay RMDs from your current employer's plan — but not from your IRAs, and not from accounts with former employers. The exception applies only to the plan sponsored by your current employer, and only if you do not own more than 5% of the company. If both conditions are met, you can defer that plan's RMDs until April 1 of the year after you retire. IRAs always follow the age-based schedule, regardless of whether you're still working.