Traditional IRAs and 401(k) accounts allow you to reduce your current taxable income by making contributions, letting your investments grow tax-deferred. In return, you’ll owe income taxes on both your contributions and any earnings when you withdraw funds in the future.
But you can’t postpone withdrawals from these tax-deferred retirement accounts forever. Once you reach a certain age, you’re required to take minimum withdrawals each year, known as required minimum distributions (RMDs).
As with many personal finance matters, RMDs can be tricky—especially since the Secure 2.0 Act, passed in 2022, brought about several changes and updates. Continue reading to find out when RMDs must begin, which accounts are now exempt, and what happens if you miss your RMD deadline.
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1. RMDs start at age 73 for those born from 1951 to 1959
The age at which you must begin taking RMDs depends on your date of birth. The Secure Act of 2019 (also called Secure 1.0) raised the starting age from 70 1/2 to 72 for individuals born on or after July 1, 1949. The Secure Act of 2022 (Secure 2.0) further increased the age to 73 for anyone born on or after January 1, 1951.
The table below summarizes these requirements.
Account Holder's Birth Date
Age When RMDs Begin
| Before July 1, 1949 | 70 1/2 |
| July 1, 1949, to December 31, 1950 | 72 |
| January 1, 1951, to December 31, 1959 | 73 |
| After December 31, 1959 | 75 |
Data source: Internal Revenue Service.
It’s important to note that once you reach the minimum age listed above, you must take RMDs from traditional 401(k)s and IRAs (including SEP and SIMPLE IRAs), even if you’re still employed. Typically, RMDs are due by December 31 each year, but you’re allowed to delay your first withdrawal until April 1 of the following year.
For example, if John turns 73 in 2025, he’s required to start taking RMDs. He can postpone his initial withdrawal until April 1, 2026, but his second RMD must be taken by December 31, 2026. Every RMD after that must be withdrawn by December 31 of each year.
2. Roth 401(k) and 403(b) plans are now exempt from RMD requirements
The Secure 2.0 Act removed the RMD requirement for Roth 401(k) and Roth 403(b) accounts. Previously, Roth IRAs were not subject to RMDs, but Roth 401(k)s and Roth 403(b)s were, creating an inconsistency.
Under the current rules, as long as the original account owner is alive, RMDs are not required from Roth-designated accounts. However, once a beneficiary inherits the account, RMD rules do apply.
3. Missed RMDs now face a lower excise tax penalty
To determine your RMD, divide your account balance as of December 31 of the previous year by a life expectancy factor from one of three IRS tables. Using the earlier example, John (who turns 73 in 2025) would calculate his RMD by dividing his December 31, 2024, balance by the appropriate life expectancy factor from the IRS table.
Most original account owners use Table III (Uniform Lifetime) to calculate their RMD, while beneficiaries use Table I (Single Life Expectancy). If your spouse is your only beneficiary and is more than 10 years younger, you’ll use Table II (Joint and Last Survivor Life Expectancy).
Before 2023, failing to take your RMD on time could result in a 50% excise tax on the amount not withdrawn. The Secure 2.0 Act reduced this penalty to 25%, and it can be lowered further to 10% if the mistake is corrected within two years. Still, the best approach is to make sure you take your RMDs on schedule.
