What are the new RMD rules for 2025 under SECURE Act 2.0?

The SECURE 2.0 Act (signed December 2022) made several important changes to Required Minimum Distribution rules. Here's what you need to know for 2024:

New RMD starting ages:

• Born 1951–1959: RMDs must begin at age 73 (changed from 72 under SECURE Act 1.0)
• Born 1960 or later: RMDs must begin at age 75 (starting in 2033)
• If you turned 72 before 2023, you're already taking RMDs under the old rules

Your first RMD deadline:

You can delay your first RMD until April 1 of the year after you reach RMD age. But if you delay, you'll need to take TWO distributions in that second year (the delayed first RMD plus the current year's RMD), which could push you into a higher tax bracket.

Key SECURE 2.0 changes:

• Reduced penalty for missed RMDs: The excise tax for failing to take your RMD dropped from 50% to 25% of the shortfall. If you correct it within the IRS "correction window" (generally by the end of the second year), the penalty drops further to 10%.

• Roth 401(k)s no longer require RMDs: Starting in 2024, Roth 401(k) accounts are exempt from RMDs during the owner's lifetime. Previously, you had to roll Roth 401(k) money into a Roth IRA to avoid RMDs. This is a major simplification.

• Roth SEP and SIMPLE IRAs: SECURE 2.0 created the ability for employers to offer Roth versions of SEP and SIMPLE IRA contributions.

• 529-to-Roth rollovers: Starting in 2024, you can roll unused 529 plan funds into a Roth IRA for the beneficiary (subject to annual Roth IRA contribution limits, $35,000 lifetime cap, and the 529 must have been open 15+ years).

How to calculate your RMD:

Divide your account balance as of December 31 of the prior year by your life expectancy factor from IRS Uniform Lifetime Table (Table III in Publication 590-B). The IRS updated these tables in 2022 — the new tables result in slightly smaller RMDs (meaning more can stay invested).

Accounts subject to RMDs: Traditional IRA, SEP IRA, SIMPLE IRA, 401(k), 403(b), 457(b). Roth IRAs are NOT subject to RMDs during the owner's lifetime.