Secure 2.0: New Required Minimum Distribution Rules


The government has rules in place that require individuals to start taking annual distributions from their pre-tax retirement accounts once they reach a certain age. Referred to as the Required Minimum Distribution (“RMD”) rules, they impact employer-sponsored retirement plans like 401(k), 403(b), defined benefit plans. They also apply to IRAs. The idea is to capture income taxes on a portion of the accounts prior to death, at which point the remainder will pass to beneficiaries and potentially receive more favorable tax treatment.

Under the RMD rules, payment of a person’s retirement account must start no later than April 1st following the year in which they attain a certain age. Once started, payments must be made each year until death or the complete distribution of the account. These payments are includable for income purposes in the year they are received.

The SECURE 2.0 legislation passed in 2022 made an important change to these rules, and it impacts any person with a pre-tax retirement account. Before 2023, the age at which distribution had to start was 72. For 2023 and future years, SECURE 2.0 has changed this age to 73.

How it works

  • Individuals born in 1950 will attain age 72 during 2022 and, therefore, must receive their first distribution by April 1, 2023.
  • Individuals born in 1951 will attain age 73 during 2024 and, therefore, must receive their first distribution by April 1, 2025.
  • There is no requirement to start distributions during 2024.
  • If a person was required to start distributions prior to 2023, they must continue to receive distributions each year.

SECURE 2.0 further increases the required starting age to 75 after 2032. However, this does not take effect for 10 years, so it is subject to change pending future legislation.

What you should do

Employers and HR representatives – If you administer a retirement plan subject to the RMD rules, make sure you adjust your procedures to avoid prematurely starting distributions for participants.

Individuals – Be aware of your delayed commencement date and make sure your plan administrator or IRA custodian isn’t starting your distributions prematurely. If you have already completed elections to commence RMDs at a certain time, make sure these are updated to reflect the current rules.

Please contact Jason Hamilton, Director of Retirement, if you have questions or would like to learn more at Jason.Hamilton@MAI.Capital.

Information updated as of Monday, August 7, 2023.

MAI Retirement is a division of MAI Capital Management, LLC (“MAI”). 

MAI is an investment adviser registered with the Securities and Exchange Commission.

MAI does not provide legal or tax advice to retirement plans.  Please consult your legal or tax advisor before making any legal or tax decisions. 

Please send your questions, comments, and feedback to: The opinions and analyses expressed herein are subject to change at any time. Any suggestions contained herein are general, and do not take into account an individual’s or entity’s specific circumstances or applicable governing law, which may vary from jurisdiction to jurisdiction and be subject to change. Distribution hereof does not constitute legal, tax, accounting, investment, or other professional advice. Recipients should consult their professional advisors prior to acting on the information set forth herein. In accordance with certain Treasury Regulations, we inform you that any federal tax conclusions set forth in this communication, were not intended or written to be used, and cannot be used by any taxpayer, for the purposes of avoiding penalties that may be imposed by the Internal Revenue Service.

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