Article Summary: RMD Rules for 2026
SECURE Act 2.0 updated when required minimum distributions (RMDs) begin, how deadlines work, and what penalties apply if you miss them. This article outlines who is affected, key dates, and recent Roth plan changes.
- RBD ages: RMD starting age moved to 73 (effective 01/01/2023) and to 75 (effective 01/01/2033), based on birth year.
- First RMD date: First RMD is due by April 1st of the year after you reach your RMD age; later years are due by December 31.
- Two RMD year: Delaying the first RMD to April 1st means taking two RMDs in the same calendar year.
- Penalties: Missed RMD amounts may face a 25% excise tax, reduced to 10% if corrected within two years.
- Roth plans: RMDs were eliminated for Roth 401(k) and Roth 403(b) plans effective 01/01/2024.
Unfortunately, account owners cannot keep their nest egg in their Traditional retirement accounts indefinitely, only withdrawing a dollar here or there when they need to or would like to. Eventually, distributions must be made from Traditional accounts and penalties can be applied if the distributions don’t meet certain minimum and deadlines.
The rules around these requirements went largely unchanged from 1986 until the passage of the SECURE Act 1.0 in 2019 and the SECURE Act 2.0 in 2022. Below is a list of some of the more common updates from SECURE Act 2.0 that might affect you:
Required Beginning Date (RBD) and Required Minimum Distribution (RMD) Changes
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- The SECURE Act 2.0 raised the Required Beginning Date (RBD) for Required Minimum Distributions (RMDs) from age 72 to age 73 (effective 01/01/2023) and then to age 75 (effective 01/01/2033).
- Individuals born prior to 1951 will not experience any changes.
- Individuals born between 1951 and 1959 must begin taking RMDs in the year they turn age 73.
- Individuals born after 1959 must begin taking RMDs in the year they turn age 75.
- The SECURE Act 2.0 raised the Required Beginning Date (RBD) for Required Minimum Distributions (RMDs) from age 72 to age 73 (effective 01/01/2023) and then to age 75 (effective 01/01/2033).
When do you need to take your first RMD? Are there exceptions?
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- You must take your first RMD by April 1st of the year after you turn age 73 (or age 75 if born after 1959).
- All following RMDs must be taken by December 31st of each year.
- If you choose to delay your first RMD until April 1st of the year after you turn age 73 (or age 75 if born after 1959) then you must take two RMDs in that same calendar year (the first RMD needing to be taken by April 1st and the second RMD needing to be taken by December 31st).
Are there penalties if I miss a deadline?
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- If you fail to withdraw your RMD in full by the respective due date, then any amount not withdrawn may be subject to an excise tax of 25%.
- This excise tax is reduced to 10% if the RMD is corrected in a timely manner within two years.
- The SECURE Act 2.0 reduced this excise tax from 50% to 25%.
- This excise tax is reduced to 10% if the RMD is corrected in a timely manner within two years.
- If you fail to withdraw your RMD in full by the respective due date, then any amount not withdrawn may be subject to an excise tax of 25%.
Roth 401(k) and Roth 403(b) Plan RMD Changes
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- Prior to the passing of the SECURE Act 2.0, RMDs were required to be taken from Roth 401(k) Plans and Roth 403(b) Plans in the same manner as Traditional IRAs.
- The SECURE Act 2.0 eliminated RMDs for both Roth 401(k) Plans and Roth 403(b) Plans, aligning them with Roth IRAs effective 01/01/2024.
Common FAQs
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- What if my nest egg is held in my Traditional 401(k) Plan from my current employer and I’m nearing my RMD age?
- Retirement plan account owners can delay taking their RMDs until the year in which they retire, unless they’re a 5% owner of the business sponsoring the plan.
- What types of retirement plans require minimum distributions?
- All employer-sponsored retirement plans, including Profit-Sharing Plans, 401(k) Plans, 403(b) Plans, and 457(b) Plans.
- The RMD rules also apply to Traditional IRAs, and IRA-based plans such as SEP IRAs, SARSEP IRAs, and SIMPLE IRAs.
- Can I withdraw more than my RMD?
- Yes, but a distribution in excess of your RMD for one year cannot be applied to the RMD for a future year.
- How are RMDs taxed?
- Account owners are taxed at their ordinary income tax rate on the amount of the withdrawn RMD.
- Any portion of the RMD that is attributable to nondeductible contributions (your “basis” or after-tax contributions) is a tax-free return of your original investment.
- What if my nest egg is held in my Traditional 401(k) Plan from my current employer and I’m nearing my RMD age?
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Schneider Downs Wealth Management Advisors, LP (SDWMA) is a registered investment adviser with the U.S. Securities and Exchange Commission (SEC). SDWMA provides fee-based investment management services and financial planning services, along with fee-based retirement advisory and consulting services. Material discussed is meant for informational purposes only, and it is not to be construed as investment, tax or legal advice. Please note that individual situations can vary. Therefore, this information should be relied upon when coordinated with individual professional advice. Registration with the SEC does not imply any level of skill or training.
