For retirement savers preparing for required minimum distributions (RMDs), recent legislation has brought significant changes to the timeline. The SECURE Act of 2019 initially raised the RMD age from 70½ to 72. This gave retirees more time before mandatory withdrawals begin. Then, the SECURE 2.0 Act of 2022 introduced further adjustments. It increased the age to 73 starting in 2023, with plans to raise it to 75 in the coming years. These changes are in response to Americans living and working longer. They provide more flexibility in how retirement savings are managed over time.
Ask a financial advisor about the best retirement strategies to prepare you for your required minimum distributions.
When Does the RMD Age Increase to 75?
The RMD age increase to 75 will happen gradually over the next decade as part of the SECURE 2.0 Act passed in December 2022. This legislation made significant changes to retirement account rules, including a phased approach to raising the required minimum distribution age. For those wondering exactly when to start withdrawing from their retirement accounts, the timeline is now clearer than before.
The RMD age will remain at 73 until January 1, 2033, when it will increase to 75. This means anyone born between 1960 and 1964 will begin their required minimum distributions at age 73. Those born in 1965 or later will enjoy the full benefit of the age 75 threshold. This decade-long transition period gives retirement savers and financial professionals time to adjust their withdrawal strategies.
This gradual increase to age 75 offers significant planning opportunities for retirement savers. The extended timeframe allows investments to potentially grow tax-deferred for additional years, which could result in larger retirement accounts. However, it is worth noting that delaying RMDs might eventually lead to larger required withdrawals and potentially higher tax brackets in later years.
What Is the Current RMD Age?
As of 2025, the RMD age stands at 73 for individuals who turn 72 after December 31, 2024. This represents the first step in the gradual increase established by the new legislation. If you turned 72 in 2024 or earlier, you are already subject to RMD rules under the previous age threshold. Therefore, you must continue taking distributions according to the existing schedule.
Not all retirement accounts follow these new RMD rules. Notably, inherited IRAs maintain different distribution requirements. Certain qualified retirement plans may require distributions when you retire, regardless of age. Additionally, Roth IRAs continue to have no RMDs during the original owner’s lifetime, though inherited Roth accounts typically do.
What Is Your RMD Age?
Your birth year directly determines when you must begin taking RMDs. If you were born in 1950 or earlier, you should already be taking RMDs. Those born between 1951 and 1959 must begin RMDs at age 73. For individuals born in 1960 or later, the required beginning age will be 75. Understanding which category you fall into is essential for proper retirement planning.
Failing to take your RMD by the deadline can result in significant penalties. Historically, the IRS imposed a steep 50% excise tax on the amount that should have been withdrawn but was not. The SECURE 2.0 Act reduced this penalty to 25%. It can be further reduced to 10% if corrected within two years. Nevertheless, these penalties can still represent a substantial financial setback in retirement.
Knowing your RMD age allows you to strategically plan your retirement income stream. Some retirees choose to take distributions before they are required if it makes sense for their tax situation. Others may benefit from qualified charitable distributions to satisfy RMD requirements while supporting causes they care about.
How to Prepare for Retirement With Your RMD Age
It is important to understand your retirement age, as well as how to properly calculate your distributions accurately. Your annual RMD amount is determined by dividing your retirement account balance by the IRS life expectancy factor table. This calculation must be performed each year, as your account balance and life expectancy factor will change. Miscalculating can lead to severe penalties, costing you 50% of the amount you should have withdrawn.
Your retirement needs and financial situation will evolve. Make it a practice to review your RMD strategy annually, adjusting as necessary to accommodate changes in your spending needs, market performance, and tax laws. This regular assessment helps maintain alignment between your retirement withdrawals and long-term financial objectives.
Bottom Line
Understanding when required minimum distributions (RMDs) begin is crucial for retirement planning. While recent legislation has increased the RMD age from 70½ to 73, there is often confusion about when the age will rise to 75. The SECURE 2.0 Act has established a clear timeline: starting January 1, 2033, the RMD age will increase to 75 years old. This gradual approach gives retirement savers more time to grow their tax-advantaged accounts before mandatory withdrawals begin.
Tips for Retirement Planning
- Retirement is difficult to plan for without proper expertise and long-term goals. It’s important to find an expert financial advisor that is with you along the way so that you can create the right plan and manage your finances to hit your goals. Finding a financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with vetted financial advisors who serve your area, and you can have a free introductory call with your advisor matches to decide which one you feel is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
- Not sure how much you need to save for retirement? Consider starting with a retirement calculator.
Photo credit: ©iStock.com/AndreyPopov, ©iStock.com/shapecharge, ©iStock.com/SeizaVisuals
Read the full article here