Who Can Delay their RMD Under SECURE 2.0?

Wednesday, January 11, 2023

By Sarah Brenner, JD
Director of Retirement Education
Follow Us on Twitter: @theslottreport

One of the provisions of the recently passed SECURE 2.0 that has gotten the most attentions is the one that allows some retirement account owners to delay their required minimum distributions (RMDs) a little longer. The new law pushes back the RMD age from 72 to 73. Eventually, it will go to 75, but that is not for another decade.

Who can benefit from this new rule?

The delayed RMD age applies to those who reach age 72 in 2023 or later. They will not have to start taking RMDs until next year (2024) when they reach age 73. The deadline for taking their first RMD would be April 1, 2025.

Example: Mick Mars, guitarist for the heavy metal band Motley Crue, will no doubt celebrate his 72nd birthday on May 4, 2023, with an all-night rager. He can also celebrate being able to delay his RMD from his retirement account. Mick will have to start taking RMDs for 2024 when he reaches age 73. He will need to take his first RMD by April 1, 2025.

Those who reached age 72 in 2022 are not so fortunate. They will be 73 in 2023, but they must continue to take RMDs.

Example: Stevie Van Zandt, guitarist for Bruce Springsteen and the E Street Band, may be born to run but he cannot run away from RMDs. He reached age 72 on November 22, 2022. He must take an RMD for 2022 by April 1, 2023, and will have to take his 2023 RMD by December 31, 2023.

Takeaway

If you reach age 72 this year, you are like Mick and you catch a break under SECURE 2.0. You can delay your RMD a little longer. You can party hard like Mick and celebrate that on your 72nd birthday.

However, if you are reaching age 73 this year, you and Stevie have something in common. You can’t outrun your 2023 RMD. You will need to take it by the end of this year.

 

Post Views: 38
Posted in: , , , ,

Content Citation Guidelines

Below is the required verbiage that must be added to any re-branded piece from Ed Slott and Company, LLC or IRA Help, LLC. The verbiage must be used any time you take text from a piece and put it onto your own letterhead, within your newsletter, on your website, etc. Verbiage varies based on where you’re taking the content from.

Please be advised that prior to distributing re-branded content, you must send a proof to [email protected] for approval.

For white papers/other outflow pieces:

Copyright © [year of publication], [Ed Slott and Company, LLC or IRA Help, LLC – depending on what it says on the original piece] Reprinted with permission [Ed Slott and Company, LLC or IRA Help, LLC – depending on what it says on the original piece] takes no responsibility for the current accuracy of this information.

For charts:

Copyright © [year of publication], Ed Slott and Company, LLC Reprinted with permission Ed Slott and Company, LLC takes no responsibility for the current accuracy of this information.

For Slott Report articles:

Copyright © [year of article], Ed Slott and Company, LLC Reprinted from The Slott Report, [insert date of article], with permission. [Insert article URL] Ed Slott and Company, LLC takes no responsibility for the current accuracy of this article.

Please contact Matt Smith at [email protected] or (516) 536-8282 with any questions.