The Secure 2.0 Act of 2022 made more than 90 changes to retirement account rules. You should check them out. The one that I would like to discuss in this email is the Required Minimum Distribution.

Currently, Americans must start taking required minimum distributions from their 401(k) and IRA accounts starting at age 72 (or 70 and a half if you turned that age before Jan. 1, 2020). The Secure 2.0 Act of 2022 raises the age for RMDs to 73, starting on Jan 1, 2023, and then further to 75, starting on Jan. 1, 2033. (Roth IRAs are not subject to RMDs.)

The new rules also reduce the penalty for failing to take RMDs. The current steep 50% excise penalty was reduced to 25% and will be further lowered to 10% if your error is corrected “in a timely manner.” The penalty reductions take effect immediately, now that the bill is signed into law. 

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