New RMD Rules: Starting Age, Penalties, Roth 401(k)s, and More

1. RMD age limits change

Before the SECURE 2.0 Act, you had to start taking RMDs from 401(k) accounts, traditional IRAs, and similar retirement savings accounts (other than Roth IRAs) in the year you turned 72 (although you had until April 1 of the following year to take your first RMD).

However, the SECURE 2.0 Act pushed the age for starting RMDs to 73 as of 2023, and will push it even further to 75 in 2033.

There is a two-step process under the SECURE 2.0 Act for increasing the age at which RMDs become necessary.

Step 1: Beginning in 2023, the age to start taking RMDs jumped from 72 to 73.

Step 2: Beginning in 2033, it creeps up again to 75.

2. RMD penalties are lower

SECURE 2.0 reduced the penalty for failing to take an RMD to 25% in all cases.

In addition, the penalty was dropped to 10% if you take the necessary RMD by the end of the second year following the year it was due.

For some, the SECURE 2.0 Act also delays the start of the statute of limitations for assessing the penalty.

For people who aren't required to file an income tax return for the tax year in question, the three-year limitations period starts on the date that an income tax return would have been due (excluding any extensions), instead of the date a tax return for the year is filed, which can be later than the normal due date.

By starting the clock sooner, some people might avoid the penalty if the IRS is slow in assessing it.

Note: Keep in mind that the IRS has waived penalties for failing to take RMDs for certain inherited IRAs in past tax years. However, the IRS has ended most waiver periods. For more information, see IRS Delays IRA RMD Rules.

3. RMDs for Roth 401(k) accounts

There are no RMDs for Roth IRAs. Previously, RMDs were required for Roth 401(k) accounts.

Now, due to SECURE 2.0, as with Roth IRAs, Roth 401(k) accounts aren't subject to the RMD rules before the account holder dies. (Post-death minimum distribution rules, which also apply to Roth IRAs, still apply.)

For most, the change was implemented in 2024. However, an exception applies to RMDs required before 2024 but not required to be paid until January 1, 2024, or later.

4. Annuities and RMD changes

SECURE 2.0 also addressed a few issues related to annuities with retirement savings accounts.

For instance, if a retirement account includes an annuity, the account was split under prior law between the part holding the annuity and the part that doesn't for purposes of applying the RMD rules. This could result in higher RMDs.

SECURE 2.0 allows you to combine distributions from both parts when calculating your annual RMD amount.

In addition, to help make annuities a more attractive component of retirement plans, SECURE 2.0 allows the following payments if certain requirements are satisfied:

• Annuity payments that increase at least annually by up to 5% per year
• Lump sum payments that result in a shortening of the payment period with respect to an annuity or a full or partial commutation of the future annuity payments
• Lump sum payments that accelerate the receipt of annuity payments that are scheduled to be received within the next 12 months
• Payments "in the nature of a dividend" or similar distribution
• Final payments upon death that don't exceed the total amount of consideration paid for the annuity payments, minus the aggregate amount of prior distributions or payments from or under the contract

Finally, SECURE 2.0 boosted the use of qualifying longevity annuity contracts (QLACs). Generally, with a QLAC, you could invest up to $145,000 or 25% of a retirement account, whichever was less, and shield those funds from RMDs.

SECURE 2.0 repealed the 25% limit and bumped the dollar amount up to $210,000 (in 2026). It also clarified that: Survivor benefits can be paid following a divorce, and an employee has 90 days from the purchase date to rescind a QLAC (though state laws and terms of your contract might make this period smaller).

5. New RMD rules for surviving spouses

Special rules exist for determining when a surviving spouse must start taking RMDs from an inherited retirement account.

One of those rules states that if an account holder dies before RMDs are required and their surviving spouse is the beneficiary (and doesn't change that status), RMDs from the inherited account aren't required until the year in which the deceased account holder would have reached age 72 or 73 (depending on their birth year).

SECURE 2.0 tweaked that rule by also allowing the surviving spouse to be treated as the deceased account owner for RMD purposes starting in 2024.

In some cases, this allows the surviving spouse to delay taking RMDs from the inherited account. (E.g., if the surviving spouse is older than the deceased spouse, allowing them to wait until the younger, deceased spouse would have hit their RMD age.)

According to IRS regulations, the treatment may be applied automatically by default as long as the surviving spouse is the sole beneficiary, removing the need to file a manual, irrevocable election, or formally notify the account administrator to trigger it.

However, this automatic default only applies if the deceased spouse passed away before reaching their required beginning date for RMDs. Otherwise, you would generally need to follow the default rules in your provider's plan and/or formally make an election to be treated as the employee.

6. QCDs used to lower RMDs

Money donated to charity through a qualified charitable distribution (QCD) counts towards your RMD. For charitable-minded older adults, QCDs are a great way to reduce the amount of money they must withdraw from an IRA.

However, QCDs were previously capped at $100,000 per year.

SECURE 2.0 allows the QCD limit to be adjusted annually for inflation (rounded to the nearest $1,000). The adjustments began in 2024. The limit for 2026 is $111,000.

In addition, as of 2023, a one-time QCD of up to $50,000 (indexed to inflation) to charities is allowed through certain charitable remainder annuity trusts, charitable remainder unitrusts, or charitable gift annuities. The amount is capped at $55,000 for 2026.

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