Video: SECURE Act 2.0: RMD Age Changes for 2023

Image of Blaine Carr and the title, "SECURE Act. 2.0: RMD Age Changes for 2023"

Are you turning 72 this year or know someone who is?  There have been some recent developments regarding the SECURE Act that you should know about.

SECURE Act 2.0: RMD Age Changes for 2023

Video Transcript:

Are you turning 72 this year or know someone who is?  There have been some recent developments regarding the SECURE Act that you should know about.

The SECURE Act was signed into law in 2019, and SECURE 2.0 in December 2022.  The main purpose of these bills is to enhance income for retirees.  Today I am going to focus on how the SECURE ACT impacts the Required Minimum Distribution (RMD) ages for the original account owner.

For many years, account owners had to start drawing from IRAs and employer retirement plans at age 70 ½. The SECURE Act increased the starting age to 72, and SECURE 2.0 further increased this age to 73.  If you turn 72 in 2023, your RMD will not be enforced this year.  Further, the starting age for RMDs will increase to age 75 in 2033.

Please note, there are no RMDs for the original owner of Roth IRAs.  Prior to passing SECURE 2.0, RMDs did apply to Roth balances inside employer retirement plans.  Beginning in 2024, the Roth balances in 401(k), 403(b), and governmental 457(b) plans will no longer be subject to RMDs.

FAQ

  • I turn 72 this year (2023). Should I still draw out the amount I thought I was going to have to take from my IRA this year?
    • If you need the money, the answer is to draw only what you need from your IRA. If you don’t need to draw much from your IRA, and you are in a reasonable tax bracket this year,  you should consider converting some of your IRA to a Roth IRA.  This will decrease the amount of your future RMDs, and grow tax-free inside the Roth IRA.  It is also worth noting that you can still take Qualified Charitable Distributions from your IRA starting at age 70 ½, even if you aren’t required to take a distribution.

I recommend you consult a tax advisor regarding your specific circumstances and how the SECURE Act impacts you.  Please join us soon for the second installment of our three-part series on the SECURE Act.