Retirement account owners have faced a moving target for the past several years, and 2024 brought the latest round of changes to required minimum distributions.
The SECURE 2.0 Act pushed the starting age to 73 for most savers, but a confusing penalty waiver and shifting IRS guidance left plenty of people unsure whether they owed a withdrawal or not.
Here's the short version: if you turned 72 in 2023 or later, you can generally wait until 73 to take your first RMD.
If you hit 73 in 2024, your first withdrawal was due by April 1, 2025 — but that delay only works once.
Every year after that, the money has to come out by December 31.
Miss that deadline and the IRS historically charged a 25% excise tax on the amount you should have withdrawn.
Thanks to SECURE 2.0, that penalty drops to 10% if you correct the mistake within a two-year window and file the right paperwork.
Still a painful hit, but far less brutal than the old rules.
The reason RMDs matter for household budgets goes beyond taxes.
Forced withdrawals from traditional IRAs and 401(k)s count as ordinary income, which can push you into a higher bracket, raise your Medicare Part B and D premiums through IRMAA surcharges, and even affect how much of your Social Security benefit gets taxed.
Retirees who don't plan around that stack can see their effective tax rate jump unexpectedly.
One common misconception is that you must sell investments to satisfy an RMD.
You can transfer shares in kind from an IRA to a taxable brokerage account, and the value on the transfer date counts toward the requirement.
That keeps you invested while satisfying the IRS.
Roth IRAs have no RMDs during the owner's lifetime, which is a big part of why they've become a favorite tool for people trying to manage future tax brackets.
Roth 401(k)s used to require withdrawals, but that rule disappeared starting in 2024.
If you're still working past 73 and own a 401(k) at that employer, you may be able to defer RMDs from that specific plan until you retire — unless you own more than 5% of the business.
For anyone with multiple IRAs, the math is simpler than it looks.
You calculate the total RMD across all traditional IRAs and can take the full amount from just one account.
Each plan has to pay out its own RMD individually.
The most practical move right now is to check whether you've satisfied this year's distribution and confirm your custodian has the correct birth date on file.
Errors there are more common than people expect, and they can trigger automatic penalty notices.
Consider setting up an automatic distribution schedule so December doesn't sneak up on you.
Pair that with a quick review of which accounts to draw from first, since the order can meaningfully change your tax bill over a 20- or 30-year retirement.
Our take: RMDs aren't glamorous, but they're one of the few retirement rules you can plan around years in advance.
Final Thoughts
Treating them as a tax-scheduling problem rather than a nuisance is where most households leave real money on the table.