SECURE ACT 2.0 – WHEN DOES THE RMD START?
The law provided for a longer starting age for required minimum distributions (RMDs) to age 73, effective January 1, 2023. The starting age will jump to 75 effective January 1, 2033. A delay in the RMD provides for an opportunity to fine tune the combination of Social Security benefits and distributions by retirement plans and traditional IRAs. The downside is that it may increase the amount of the RMD as the funds in the plan(s) continue to grow. There is no RMD requirement for funds in a Roth IRA.
If the RMDs were started before 2023, the changes do not affect them. Anyone who turned 72 during or before 2022 follows the RMD rules in place at the start of 2022. Those who turned 72 in 2022 must take their first RMD no later than April 1, 2023, and their second RMD by December 31, 2023, unless they qualify for an exception.
If the individual turns 72 in 2023, their first RMD will be for 2024 (the year they turn 73) and can be taken as late as April 1, 2025.
For those who turn 73 in 2023 through 2032, the starting age for RMDs is 73 and the first RMD must be taken no later than April 1 of the year following the year they turn 73.
The beginning age for RMDs is 75 for those who turn 74 after December 31, 2032.
Another way to look at it is the beginning age for RMDs is 73 for those born from 1951 through 1959 and is 75 for those born in 1960 or later. The first payment can be delayed until April 1 of the following year, but then the 2nd payment must be taken by December 31 of the same year. Whether the first payment is delayed till the following year is determined by the individual’s situation.