RETIREMENT & OTHER CONCEPTS · 5 MIN READ

RMDs and Beneficiary Rules After the SECURE Acts

Required minimum distributions (RMDs) force tax-deferred money out of retirement accounts on a schedule. SECURE 2.0 set the applicable age at 73 for individuals reaching age 72 after December 31, 2022, rising to 75 for those reaching age 74 after December 31, 2032 (practically, people born 1960 or later). The required beginning date remains April 1 of the year after reaching the applicable age — with a later option for non-owner employees still working. Lifetime RMDs are computed from the Uniform Lifetime Table, switching to the Joint Life table when the sole spouse beneficiary is more than 10 years younger. The penalty for a missed RMD, once a brutal 50%, is now 25% of the shortfall — and only 10% if corrected within the correction window. RMDs from multiple IRAs can be aggregated and taken from any one IRA, but each 401(k) must satisfy its own RMD separately. Death rules changed even more. The SECURE Act eliminated the lifetime stretch IRA for most beneficiaries: a designated beneficiary who is not in an eligible category must empty the inherited account by the end of the year containing the 10th anniversary of the owner's death. Eligible designated beneficiaries (EDBs) — the surviving spouse, minor children of the owner until majority, disabled and chronically ill individuals, and beneficiaries not more than 10 years younger than the owner — keep life-expectancy payouts. A successor beneficiary who inherits from a non-eligible designated beneficiary does not get a fresh clock; the account must still be emptied by the end of the original 10-year window measured from the original owner's death. Final regulations also require annual RMDs within the 10-year window when the owner died on or after the required beginning date.