Required Minimum Distributions: Navigating the Maze

Tax-deferred accounts like traditional IRAs and 401(k)s are a deal with the IRS: you deduct contributions today in exchange for a mandatory, taxed payout tomorrow. These forced payouts are Required Minimum DistributionsĀ (RMDs).

Under SECURE 2.0 ( IRC §401(a)(9)(C)(i)(I)), the starting age for RMDs is currently fixed at 73, and will rise to 75 in 2033 (specifically for those born in 1960 or later). The only common way to delay this is if you are actively employed by the company sponsoring the 401(k) and do not own more than 5% of the business.