RMD Rules Just Changed Again — What You Need to Know
SECURE 2.0 updates pushed RMDs to age 73 (and 75 by 2033). Here's how to plan for the next decade.
Current RMD ages
- Born 1951–1959: RMDs start at 73.
- Born 1960 or later: RMDs start at 75.
How RMDs are calculated
Take your December 31 IRA balance and divide by an IRS life-expectancy factor. At 73 the factor is 26.5, so RMD is roughly 3.8% of the balance that year, growing to ~5% at 80 and ~8% at 90.
The penalty for missing one
Used to be 50%. Now 25%, dropped to 10% if you fix it within two years. Still steep — automate the withdrawal.
QCDs (Qualified Charitable Distributions)
If you're 70½+, you can send up to $105,000/year directly from your IRA to charity. It satisfies your RMD and doesn't count as taxable income. Best tax move available to charitable retirees.
Coordinate with Roth conversions
Once RMDs start, your bracket fills up automatically. Do aggressive Roth conversions in your 60s, then RMDs are smaller and less painful.
Bottom line
The new 73/75 start ages give you more conversion runway. Use it. Automate the RMD itself once it starts — the 25% penalty isn't worth forgetting one year.