Required minimum distributions (RMDs) are mandatory withdrawals from certain retirement accounts, like IRAs and 401(k)s, starting at a specific age. The age was 70 ½, then 72, but the SECURE 2.0 Act, which passed in December 2022, changed this age to 73. In addition, this age will increase to 75 in 2033.

In the SECURE 2.0 Act, Congress provided the following information:

• If born on or after January 1, 1951, and before January 1, 1960, the RMD age is 73.
• If born on or after January 1, 1959, the RMD age is 75.

Looking at these guidelines, if you were born in 1959, you may be wondering, “Wait. Do I need to start making distributions when I’m 73 or 75?”

This drafting error means that individuals born in 1959 have two RMD ages: 73 and 75. If you fail to withdraw the RMD on time, there can be consequences. For every dollar not withdrawn, the IRS will charge a 25% penalty, known as an excise tax. Knowing this, it’s clearly important for 59ers to know when they need to start making withdrawals.

In July 2024, the following proposals were made to Congress:

• If born before July 1, 1949, the RMD age is 70 ½.
• If born on or after July 1, 1949, and before January 1, 1951, the RMD age is 72.
• If born on or after January 1, 1951, and before January 1, 1960, the RMD age is 73.
• If born on or after January 1, 1960, the RMD age is 75.

If you have questions about your Required Minimum Distributions (RMD’s) or how to calculate them, we are here to help. Contact us today.

Required minimum distributions (RMDs) are mandatory withdrawals from certain retirement accounts, like IRAs and 401(k)s, starting at a specific age. The age was 70 ½, then 72, but the SECURE 2.0 Act, which passed in December 2022, changed this age to 73. In addition, this age will increase to 75 in 2033.

In the SECURE 2.0 Act, Congress provided the following information:

• If born on or after January 1, 1951, and before January 1, 1960, the RMD age is 73.
• If born on or after January 1, 1959, the RMD age is 75.

Looking at these guidelines, if you were born in 1959, you may be wondering, “Wait. Do I need to start making distributions when I’m 73 or 75?”

This drafting error means that individuals born in 1959 have two RMD ages: 73 and 75. If you fail to withdraw the RMD on time, there can be consequences. For every dollar not withdrawn, the IRS will charge a 25% penalty, known as an excise tax. Knowing this, it’s clearly important for 59ers to know when they need to start making withdrawals.

In July 2024, the following proposals were made to Congress:

• If born before July 1, 1949, the RMD age is 70 ½.
• If born on or after July 1, 1949, and before January 1, 1951, the RMD age is 72.
• If born on or after January 1, 1951, and before January 1, 1960, the RMD age is 73.
• If born on or after January 1, 1960, the RMD age is 75.

If you have questions about your Required Minimum Distributions (RMD’s) or how to calculate them, we are here to help. Contact us today.