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Secure Act 2.0 and Your IRA Distribution

January 30, 2023

When Congress passed the Secure Act 2.0, it included changes to how IRA Required Minimum Distributions (RMDs) are calculated. Here’s what you need to know about the Secure Act 2.0 and your IRA distribution going forward.

Minimum Required Distribution Age Change

The age at which owners of retirement accounts must start taking RMDs will increase to 73, starting January 1, 2023. IRA owners who attained age 72 on or before December 31, 2022, will continue to be required to take their RMDs for 2022 and 2023 and beyond. IRA owners who attain age 72 in 2023 are not required to take their first RMD until the year in which they attain age 73. SECURE 2.0 also pushes the age at which RMDs must start to 75 starting in 2033.

Other Takeaways from the Secure Act 2.0

  • The penalty for failing to take an RMD will decrease to 25% of the RMD amount, from 50% currently, and 10% if corrected in a timely manner for IRAs.
  • Starting in 2024, RMDs will no longer be required from Roth accounts in employer retirement plans.
  • Catch-up contributions will increase in 2025 for 401(k), 403(b), governmental plans, and IRA account holders.
  • Defined contribution retirement plans will be able to add an emergency savings account associated with a Roth account.

Want to learn more about the Secure Act 2.0, your IRA distribution, or what any of it means for you? Make an appointment to chat with a pro at Columbia Credit Union.