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Secure Act 2.0:  RMD Start Age Pushed Back to 73 Starting in 2023

On December 23, 2022, Congress passed the Secure Act 2.0, which moved the required minimum distribution (RMD) age from the current age of 72 out to age 73 starting in 2023. They also went one step further and included in the new law bill an automatic increase in the RMD beginning in 2033, extending the RMD start age to 75.

Secure Act 2.0 RMD Age 73

On December 23, 2022, Congress passed the Secure Act 2.0, which moved the required minimum distribution (RMD) age from the current age of 72 out to age 73 starting in 2023.  They also went one step further and included in the new law bill an automatic increase in the RMD beginning in 2033, extending the RMD start age to 75.

This is the second time within the past 3 years that Congress has changed the start date for required minimum distributions from IRAs and employer-sponsored retirement plans.  Here is the history and the future timeline of the RMD start dates:

1986 – 2019:     Age 70½

2020 – 2022:     Age 72

2023 – 2032:     Age 73

2033+:               Age 75 

You can also determine your RMD start age based on your birth year:

1950 or Earlier:   RMD starts at age 72

1951 – 1959:      RMD starts at age 73

1960 or later:      RMD starts at age 75   

What Is An RMD?

An RMD is a required minimum distribution.   Once you hit a certain age, the IRS requires you to start taking a distribution each year from your various retirement accounts (IRA, 401(K), 403(b), Simple IRA, etc.) because they want you to begin paying tax on a portion of your tax-deferred assets whether you need them or not. 

What If You Turned Age 72 In 2022?

If you turned age 72 anytime in 2022, the new Secure Act 2.0 does not change the fact that you would have been required to take an RMD for 2022.  This is true even if you decided to delay your first RMD until April 1, 2023, for the 2022 tax year.    

If you are turning 72 in 2023, under the old rules, you would have been required to take an RMD for 2023; under the new rules, you will not have to take your first RMD until 2024, when you turn age 73.

Planning Opportunities

By pushing the RMD start date from age 72 out to 73, and eventually to 75 in 2033, it creates more tax planning opportunities for individuals that do need to take distributions out of their IRAs to supplement this income.  Since these distributions from your retirement account represent taxable income, by delaying that mandatory income could allow individuals the opportunity to process larger Roth conversions during the retirement years, which can be an excellent tax and wealth-building strategy. 

Delaying your RMD can also provide you with the following benefits:

Additional Secure Act 2.0 Articles

About Michael……...

Hi, I’m Michael Ruger. I’m the managing partner of Greenbush Financial Group and the creator of the nationally recognized Money Smart Board blog . I created the blog because there are a lot of events in life that require important financial decisions. The goal is to help our readers avoid big financial missteps, discover financial solutions that they were not aware of, and to optimize their financial future.

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Frequently Asked Questions (FAQs):

What is the new RMD age under the Secure Act 2.0?
Starting in 2023, the required minimum distribution (RMD) age increased from 72 to 73. Beginning in 2033, the RMD age will rise again to 75.

How does the new RMD timeline compare to previous rules?
Before 2020, RMDs began at age 70½. The Secure Act of 2019 moved it to age 72, and Secure Act 2.0 now increases it to age 73 in 2023 and age 75 starting in 2033.

How do you determine your RMD start age based on birth year?
If you were born in 1950 or earlier, your RMD started at 72. Those born between 1951 and 1959 begin at 73, and anyone born in 1960 or later will start at 75.

What if I turned 72 in 2022?
If you reached age 72 in 2022, you are still required to take your first RMD for that tax year, even if you delayed it until April 1, 2023. The new rule applies only to individuals turning 72 in 2023 or later.

What are the benefits of delaying RMDs?
Delaying RMDs can create valuable tax planning opportunities, including the ability to complete larger Roth conversions, reduce taxable income, lower Medicare premiums, and minimize taxes on Social Security benefits.

Can delaying RMDs impact long-term investment growth?
Yes. By postponing mandatory withdrawals, your tax-deferred savings can remain invested and continue to grow, potentially increasing your retirement assets over time.

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