Prior to the Secure Act 2.0, all individuals were required to take minimum distributions from their retirement accounts at 72. This includes IRAs, Simple IRAs, SEPs, 401Ks, and Roth 401ks. This did not include the 401K of any employer for which you still work. 

 

 
However, recently the Secure Act 2.0 was passed. This legislation increased required minimum distribution age to 73 beginning in 2023. If you are 72 in 2023, you are now allowed to defer taking payments from your IRA, 401k, SEP, Simple IRA for one more year.  By 2033, they plan to raise the RMD age to 75. This change also no longer requires RMDs from Roth 401Ks making their distributions work the same as Roth IRAs beginning in 2024. 

If for some reason you missed taking a required minimum distribution in the past the Secure Act 2.0 has decreasing the penalty from 50% to 25%. Also, if you fix the mistake in a timely manners the penalty will be further reduced to 10% for IRAs. 

 

Here at Global View we help to remind all our clients to take their required minimum distribution before year end each year. If you forgot to take a past RMD and would like help on going give us a call.