The Secure 2.0 Act has changed the rules for required minimum distributions (RMDs) on retirement accounts. RMDs now start at age 73 for those born between 1951 and 1959. While RMDs on Roth 401(k) and 403(b) plans are eliminated while the account holder is alive, beneficiaries still need to take RMDs. Failure to take RMDs on time results in penalties, up to 25%. RMD rules can be complex, so understanding the changes made by the Secure 2.0 Act in 2022 is crucial for retired workers in 2026.

The age for RMDs depends on the account holder’s birth date. The Secure 1.0 Act raised the starting age to 72 for those born after 1949, and the Secure 2.0 Act raised it to 73 for those born after 1951. Traditional 401(k) plans and traditional IRAs are subject to RMD rules, with the first withdrawal due by Dec. 31 or April 1 of the following year. Account holders must take subsequent RMDs annually by Dec. 31.

RMDs are calculated based on the account balance and life expectancy factors. Penalties for not taking RMDs on time have been reduced by the Secure 2.0 Act, with excise tax penalties lowered to 25% and potentially 10% if corrected within two years. Understanding these rules and changes is essential for retirement planning in 2026.

Read more at Yahoo Finance: 3 Required Minimum Distribution (RMD) Rule Changes Retirees Must Know in 2026