RMDs after SECURE 2.0
RMDs After SECURE 2.0: What Retirees Need to Know
The SECURE 2.0 Act reshaped retirement planning—especially Required Minimum Distributions (RMDs). Congress raised the RMD age, changed penalties, and added planning opportunities. These updates affect retirement accounts, annuity income, and even Medicare costs. At Diversified Insurance Brokers, we help clients nationwide adjust to these new rules and protect lifetime income. If you’re balancing distributions with guaranteed income, review our overview of the deferred annuity with lifetime payout to see how annuities can complement RMDs.
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New RMD Age Rules
Under SECURE 2.0, the age for RMDs increased:
- Age 73 for individuals born between 1951 and 1959.
- Age 75 for those born in 1960 or later.
This gives retirees more time for tax planning. For some, it means converting IRA dollars to Roth before RMDs begin. For others, it means delaying income until after retirement expenses stabilize. If you’re unsure which path to take, our annuity with inflation protection guide shows how to hedge income against rising costs while waiting on RMDs.
Penalty Relief
Before SECURE 2.0, missing an RMD triggered a 50% penalty. The law reduced this to 25%, and even 10% if corrected quickly. While compliance is easier, penalties can still damage retirement security. Using annuities for predictable income can reduce RMD mistakes. Learn more about flexibility in our breakdown of annuity free withdrawal rules.
Coordination with Medicare and IRMAA
RMD withdrawals increase taxable income, which can push retirees into higher Medicare premium brackets (IRMAA surcharges). The new law gives more planning time to smooth withdrawals across years. For Medicare-focused retirees, read our IRMAA planning strategies to coordinate retirement income with lower Medicare costs.
Case Study: Retiree With Multiple Accounts
Profile: John (age 72) has a traditional IRA, a 401(k), and an income annuity. With SECURE 2.0, he delays his first RMD until age 73. In the meantime, he uses his annuity income to cover essential expenses.
Strategy: Convert a portion of IRA assets to Roth during the gap years (ages 70–73), lowering future RMDs and future IRMAA exposure. He also keeps part of his funds in a fixed annuity ladder to spread liquidity across different timeframes.
Outcome: John reduces lifetime taxes, avoids IRMAA surcharges, and maintains steady income with annuity guarantees.
Review Your RMD Strategy
We’ll calculate your RMDs, align them with annuity and Social Security income, and help minimize Medicare premium impacts.
Talk to an Advisor
We’ll walk through SECURE 2.0 changes, RMD timing, and annuity options so your retirement plan works with new rules.
FAQs: RMDs After SECURE 2.0
What age do RMDs start after SECURE 2.0?
Age 73 for those born 1951–1959, and age 75 for those born in 1960 or later.
What is the penalty for missing an RMD now?
The penalty is reduced to 25%, or 10% if corrected promptly.
Do annuities count toward RMDs?
Yes. Qualified annuities inside retirement accounts count toward RMDs. Income annuities may satisfy part or all of the requirement.
How does SECURE 2.0 affect Roth IRAs?
Roth IRAs still have no RMDs during the account owner’s lifetime. Converting to Roth before RMD age can reduce future taxable withdrawals.
Will RMDs increase my Medicare premiums?
Yes, withdrawals increase adjusted gross income, which can trigger IRMAA surcharges. Proper planning can reduce these costs.
