New RMD Rules: Starting Age, the 10-Year Rule, and Penalties

The new rules for required minimum distributions, reshaped by the SECURE Act of 2019 and SECURE 2.0 in 2022, move the starting age to 73 or 75 depending on when you were born, cut the penalty for a missed withdrawal from 50% to 25% (and to 10% if you fix it in time), end lifetime RMDs on Roth accounts held inside employer plans, and force most non-spouse heirs to drain an inherited retirement account within 10 years. Each of these changes has traps worth knowing before your first distribution year arrives.

Your New Starting Age Depends on Your Birth Year

The old 70½ trigger is gone for anyone who hadn’t already reached it by the end of 2019. SECURE 2.0 then layered a tiered schedule on top of the original SECURE Act’s move to 72:

Born 1950 or earlier: RMDs started at 72, or at 70½ for those who hit that milestone before 2020.
Born 1951 through 1959: RMDs begin at 73.
Born 1960 or later: RMDs begin at 75. The earliest first distribution year in this group is 2035.

These ages cover traditional IRAs, SEP IRAs, SIMPLE IRAs, and most employer plans including 401(k)s and 403(b)s.¹ If you turned 73 in 2024 or 2025, you’re already on the clock.

The Still-Working Exception Has Limits

Traditional IRAs give no break for continued employment. You must start withdrawals at your applicable age whether you’re working or not.²

Employer plans work differently. If you’re still with the company, RMDs from that employer’s plan can wait until April 1 of the year after you actually retire.¹ Two catches often trip people up. The delay only applies to your current employer’s plan, not old 401(k)s left with prior employers. And it’s off the table entirely if you own 5% or more of the business sponsoring the plan.²

The April 1 First-Year Trap

Your first RMD carries a grace period: it isn’t due until April 1 of the year after you reach your starting age. Every subsequent RMD is due by December 31.¹ Use that grace period and you’ll take two RMDs in the same calendar year, your delayed first one before April 1 and your regular second one before December 31. Stacking them can push you into a higher tax bracket and, because Medicare looks back two years, spike your Part B and Part D premiums through IRMAA surcharges.² Taking the first RMD in the same year you actually reach your starting age often works out cheaper than deferring.

Roth 401(k)s No Longer Have Lifetime RMDs

Roth IRAs have never required distributions during the original owner’s lifetime.³ Roth money inside employer plans used to be different, subject to RMDs even though it had already been taxed. SECURE 2.0 closed that gap. Starting with the 2024 tax year, designated Roth accounts in 401(k)s, 403(b)s, and similar plans are exempt from RMDs during the account owner’s life.² All Roth dollars now follow the same rule.

Inherited Accounts and the 10-Year Rule

This is the biggest structural change for anyone who might inherit a retirement account, or leave one to a non-spouse. The old “stretch IRA,” which let non-spouse beneficiaries spread distributions across their own life expectancy, is gone for most heirs. Under the SECURE Act, the entire inherited account generally must be emptied by the end of the 10th calendar year after the original owner’s death.⁴

When You Must Take Annual Withdrawals During the 10 Years

Whether you have to take something each year during that window depends on how old the original owner was at death.

If the owner died before reaching their required beginning date, you have full flexibility. Take money in any pattern across the 10 years, as long as the account is drained by year 10.

If the owner died on or after their required beginning date, you must take annual RMDs in years one through nine (calculated on your own life expectancy) and clear whatever’s left by the end of year 10. Many beneficiaries missed this after the SECURE Act passed, assuming the whole 10 years was flexible. The IRS granted penalty relief for missed distributions from 2021 through 2024, most recently under Notice 2024-35.⁵ That relief has expired. Beginning in 2025, the annual RMD requirement during the 10-year window is fully enforced, and a missed year triggers the excise tax.

Beneficiaries Exempt From the 10-Year Rule

Five categories, called eligible designated beneficiaries, can still stretch distributions:

Surviving spouses, who also have the option of rolling the inherited account into their own IRA.
Minor children of the account owner. They stretch until age 21, at which point their 10-year clock starts. This applies only to the owner’s own children, not grandchildren.⁴
Disabled or chronically ill individuals, for as long as the condition continues.
Beneficiaries not more than 10 years younger than the deceased, such as siblings or near-age friends.⁴

When an eligible designated beneficiary who was stretching distributions dies, the successor beneficiary does not inherit the stretch. A fresh 10-year window opens from the eligible beneficiary’s death, and if annual RMDs were already underway, the successor generally continues them through year nine and empties the account by the end of year 10.

The Missed-RMD Penalty Is Smaller, and Fixable

SECURE 2.0 dropped the excise tax on a missed RMD from 50% of the shortfall to 25%.⁶ The bigger change is the correction window. If you catch the mistake, take the missed distribution, and file a return reflecting the penalty before the IRS assesses it or before the end of the second tax year after the year the penalty was imposed (whichever comes first), the rate falls to 10%.⁷

Report the penalty on Form 5329, filed with your regular return.⁸ If the failure was a genuine error and you’ve since taken the missed distribution, the IRS can waive the penalty entirely. The waiver isn’t automatic; you have to explain what happened and show that the distribution has been made.

Qualified Charitable Distributions Now Adjust for Inflation

If you’re at least 70½, a qualified charitable distribution lets you send money straight from a traditional IRA to an eligible charity. The transfer bypasses your taxable income and counts toward your RMD for the year.⁹

SECURE 2.0 indexed the annual QCD cap, previously stuck at $100,000, for inflation. The 2026 limit is $111,000 per person; each spouse aged 70½ or older can use their own limit. The law also added a one-time election permitting a QCD of up to $55,000 in 2026 to a split-interest vehicle such as a charitable remainder annuity trust or charitable gift annuity, allowing a charitable transfer that still pays income back to you for life.

Because a QCD keeps the distribution out of your adjusted gross income entirely, it’s often more efficient than taking the RMD and then writing a check, particularly if you don’t itemize or if the extra income would push you into an IRMAA tier.

QLACs Got Roomier

SECURE 2.0 removed the old cap that limited premiums for a Qualifying Longevity Annuity Contract to 25% of your account balance and set a straight dollar limit indexed for inflation. The 2026 QLAC premium limit is $210,000.¹⁰ Money used to buy a QLAC is excluded from the account balance for RMD calculations, shrinking your required withdrawals in earlier years, and the annuity itself is designed to start payments later in life, often at 80 or 85. The law also ended the old bifurcation rule that forced annuity holdings inside a retirement account to be treated separately from the rest of the balance for RMD purposes.

1
Internal Revenue Service. Retirement Topics – Required Minimum Distributions (RMDs)
2
Internal Revenue Service. Retirement Plan and IRA Required Minimum Distributions FAQs
3
Office of the Law Revision Counsel. 26 U.S. Code 408A – Roth IRAs
4
Internal Revenue Service. Retirement Topics – Beneficiary
5
Internal Revenue Service. Notice 2024-35 – Certain Required Minimum Distributions for 2024
6
Office of the Law Revision Counsel. 26 USC 4974 – Excise Tax on Certain Accumulations in Qualified Retirement Plans
7
eCFR. 26 CFR 54.4974-1 – Excise Tax on Accumulations in Qualified Retirement Plans
8
Internal Revenue Service. Instructions for Form 5329
9
Internal Revenue Service. Seniors Can Reduce Their Tax Burden by Donating to Charity Through Their IRA
10
Fidelity. SECURE 2.0 – Rethinking Retirement Savings