New IRS and Treasury Department Regulations on Required Minimum Distributions: Key Takeaways and Implications
Date: July 19, 2024
Today, the IRS and Treasury Department unveiled long-anticipated final regulations on Required Minimum Distributions (RMDs). These RMDs are mandatory yearly withdrawals from individual retirement accounts (IRAs), 401(k)s, and other tax-deferred retirement plans. The new regulations clarify changes from the SECURE Act of 2020 and the SECURE 2.0 Act of 2022 and will take effect on January 1, 2025.
Background: SECURE Act and SECURE 2.0 Act
The SECURE Act, effective in 2020, made significant changes to retirement savings laws. Key changes included increasing the RMD age from 70½ to 72 and requiring most non-spouse beneficiaries to withdraw all inherited retirement account funds within 10 years. The SECURE 2.0 Act, signed in December 2022, further increased the RMD age to 73 starting in 2023 and to 75 starting in 2033, alongside other provisions to boost retirement savings and streamline plan management.