SECURE 2.0 Act Raises RMD Age to 73: What Retirees Need to Know

Retirees in the US must withdraw funds from traditional retirement accounts (401Ks) annually once they reach a mandatory age set by the IRS, known as required minimum distributions (RMDs). The SECURE Act raised the RMD age from 70 ½ to 72 in 2019.

This year, the age for required minimum distributions (RMDs) is increasing to 73, as part of the SECURE 2.0 Act in the Consolidated Appropriations Act signed into law by President Biden on December 29, 2022. This act, part of a $1.7 trillion spending bill, updates the previous SECURE Act signed in 2019, which raised the RMD age from 70 ½ to 72.

The SECURE 2.0 Act raises the RMD age from 72 to 73 starting in 2023, and eventually to 75 starting in 2033. If you turned 72 before 2023, take RMDs as usual. If turning 72 in 2023, you can wait an extra year, according to an article published by The Motley Fool on December 30, 2022.

Meaning, as stated by Fidelity Investment on January 3, 2023, if you reached 72 years old in 2022 or earlier, you must still take your RMDs as planned. However, if you will turn 72 in 2023 and have already planned your withdrawal, you should consider revising your plan.

The SECURE 2.0 Act not only raises the RMD age to 73, but it also lowers penalties for those who don’t take required distributions and alters the catch-up contribution amount for workers between 60 and 63 with employer-sponsored plans, according to Charles Schwab Corporation on December 23, 2022.