How RMDs work after the SECURE Act 2.0.

SECURE Act 2.0 — passed at the end of 2022 — quietly reshaped retirement-account distribution rules in ways that matter to almost every retiree with pre-tax savings. Most of the changes are favorable. A few create planning opportunities that didn't exist before. The headline rules are straightforward; the implications take some sitting with.

The new start ages

RMDs now begin at age 73 for anyone who reaches 73 between 2023 and 2032. For anyone born in 1960 or later — so reaching 73 in 2033 or after — the start age moves to 75. That gives many retirees an extra two to three years of bracket-management room compared to the old age-70½ rule.

The first RMD can be deferred to April 1 of the year after you turn 73 (or 75). Almost everyone takes it in the calendar year they turn 73 instead — deferring stacks two RMDs into the next calendar year and usually moves you into a higher bracket. Spread, don't stack.

Still-working delays inside current-employer plans

If you're still W-2 employed by the company that sponsors your 401(k) at age 73, you can usually delay RMDs from that specific plan until you actually retire — provided you don't own more than 5% of the company. The exception applies plan-by-plan, so old 401(k)s from prior employers must still take RMDs on schedule.

This is one of the few situations where rolling old 401(k)s into your current plan (rather than into an IRA) can be advantageous: the current-plan still-working exception applies to the consolidated balance.

The penalty got smaller — but it didn't go away

The penalty for missing an RMD dropped from 50% of the shortfall to 25% — and to 10% if you correct it within two years and file Form 5329 with an explanation. That's a meaningful softening, but a 25% federal penalty on top of ordinary income tax on the distribution still hurts.

The most common cause of a missed RMD I see is the year a spouse dies. The surviving spouse, dealing with grief and paperwork, simply forgets. Custodians notify, but not always in time. A simple calendar reminder set every January for the rest of life is the cheapest insurance available.

Roth 401(k) lifetime RMDs — gone for original owners

Starting in 2024, Roth 401(k) and Roth 403(b) balances no longer require lifetime RMDs for the original owner. This brings them in line with Roth IRAs, which have never required lifetime RMDs. Before 2024, most people rolled Roth 401(k)s to Roth IRAs at retirement just to dodge the lifetime RMD requirement. That maneuver is no longer necessary — although there are still other reasons to consolidate (one set of statements, broader investment menu).

Inherited Roth accounts (including Roth IRAs) still face the 10-year rule under SECURE 2.0. See the inherited IRA guide for the beneficiary side.

QCDs — still the most efficient charitable tool over 70½

Qualified charitable distributions remain available starting at age 70½. You can transfer up to $108,000 (2025 limit, indexed) directly from a traditional IRA to a qualifying charity. The transfer never enters your taxable income — it doesn't increase AGI, doesn't trigger IRMAA Medicare surcharges, doesn't reduce other deductions, and doesn't push you into a higher bracket. It also counts toward your RMD.

SECURE 2.0 added a one-time QCD election of up to $54,000 (2025) to fund a charitable gift annuity or charitable remainder trust. Worth investigating with a CPA if lifetime income from a gift is appealing. See the charitable giving article for the full mechanics.

Planning the gap years before RMDs

The window between retirement (often 62–67) and RMD start (73–75) is where most of the high-value tax planning happens. Taxable income is usually at its lifetime low — Social Security may not have started, pension may be smaller than working income, capital gains can be harvested at the 0% bracket up to a threshold. That window is the prime time for Roth conversions, filling lower brackets year by year.

Skip the gap years and RMDs land at the bracket they land at — usually higher than the gap-year brackets, sometimes meaningfully so. The RMD math is fixed once it starts. Pre-RMD planning is the only place the math is flexible.

For Houston households with employer stock in a 401(k), there's an additional fork: the net unrealized appreciation election is a one-shot, irreversible decision that can dramatically reduce the lifetime tax on a concentrated position. The decision must be made before any partial distribution from the plan.

Aggregation rules nobody learns until it matters

RMDs from traditional IRAs can be aggregated — calculate the total RMD across all your traditional IRAs and pull it from whichever account makes sense. 401(k) and similar workplace-plan RMDs must be taken plan-by-plan and cannot be aggregated with IRAs.

Inherited IRA RMDs (when applicable) cannot be aggregated with your own. They're a separate calculation on a separate timeline. Many people miss this in the first year of inheritance.

Spouses can sometimes use spousal-rollover rules to move an inherited account into their own IRA and reset the RMD calendar based on their own age. Non-spouse beneficiaries usually cannot — they fall under the 10-year-rule regime for most accounts.

Roth conversions and the IRMAA cliff

Every dollar you don't convert before RMDs start is a dollar you'll be forced to recognize as income later. Every dollar you convert too aggressively in a single year can shove you across an IRMAA threshold and raise your Medicare premium for an entire year. The art is filling brackets toward (but not over) the next IRMAA tier each year — a multi-year exercise that benefits from an actual model rather than a rule of thumb.

I usually start the Roth-conversion conversation 3–5 years before retirement and run the multi-year projection annually. It's one of the few places in retirement planning where the math is both clean and consequential.