What the SECURE 2.0 Act Means for Your RMD
The SECURE 2.0 Act was signed into law in late 2022 with sweeping changes to retirement savings plans. These changes are positive and allow individuals to keep their retirement savings growing for longer.
What You Need to Know:
As of this year, the beginning age for taking the Required Minimum Distribution (RMD) is 73
Beginning in 2033 the required beginning age will be 75
Spousal beneficiaries can now rollover inherited IRAs into their own IRA accounts
For those turning age 72 this year (2023), you will not have to begin taking RMDs from your IRA until next year, 2024, when you reach age 73. The chart below provides a table that breaks down the age requirements.
RMDs for Surviving Spouse Beneficiaries1
Under SECURE 2.0, the surviving spouse can elect to be treated in the same fashion as the deceased spouse. This option becomes available in 2024, and has the following provisions:
Required Minimum Distributions (RMDs) for the surviving spouse will be delayed until the deceased spouse would have reached the age at which RMDs would have commenced had they lived — age 73 or 75, depending upon their birth year.
Once the RMDs for the decedent would need to commence, they would be calculated using the IRS Uniform Lifetime Table versus the Single Life Expectancy Table that is currently required for the surviving spouse and other beneficiaries. The Uniform Lifetime Table will result in a lower RMD calculation.
If the surviving spouse dies before RMDs begin on the deceased spouse’s IRA, then the surviving spouse’s beneficiaries would be treated as if they were the original beneficiaries of the original account holder. This would allow any of these beneficiaries who could be classified as eligible designated beneficiaries under the original Secure Act to stretch distributions over their life expectancy versus having to take distributions under the 10-year rule.
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