Required Minimum Distributions: A Strategy Guide Under SECURE 2.0

RMD basics under SECURE 2.0

Required Minimum Distributions are the IRS's mandatory annual withdrawals from most tax-deferred retirement accounts. SECURE 2.0 changed the timing in two steps:

RMDs apply to Traditional IRAs, SEP-IRAs, SIMPLE IRAs, 401(k)s, 403(b)s, 457(b)s, and most defined benefit plans. As of 2024, Roth 401(k) and Roth 403(b) accounts no longer require RMDs during the original owner's lifetime, matching Roth IRA treatment.

How the RMD is calculated

For each account, the IRS divides the prior-year December 31 balance by a life expectancy factor from one of three tables:

• Uniform Lifetime Table — most owners.
• Joint Life and Last Survivor Table — when the sole beneficiary is a spouse more than 10 years younger.
• Single Life Table — most non-spouse beneficiaries of inherited accounts.

The first-year trap

The IRS allows the first RMD to be delayed until April 1 of the year after the Required Beginning Date. Doing so stacks two RMDs into one calendar year — the prior-year delayed RMD and the current-year RMD — often pushing income into a higher bracket and triggering IRMAA in the same year.

What you can (and can't) aggregate

• Traditional IRAs: calculate per account, then take the total from any one or any combination.
• 403(b)s: same aggregation rule as IRAs.
• 401(k)s and other employer plans: calculated and distributed per plan — no aggregation across plans, and no aggregation with IRAs.
• Inherited IRAs: can be aggregated only with other inherited IRAs from the same decedent.

Qualified Charitable Distributions

Owners age 70½ or older can direct up to $108,000 (2025, indexed annually) per year from an IRA directly to a qualifying public charity. The QCD counts toward the RMD but is excluded from gross income — a more efficient outcome than taking the RMD as taxable income and then itemizing a charitable deduction.

QCD requirements

1. Owner must be at least 70½ on the date of the distribution.
2. Funds must move directly from the IRA custodian to the charity — no intermediate deposit to a personal account.
3. Donor-advised funds and most private foundations do not qualify.
4. Report on Form 1040 by entering the gross distribution and writing "QCD" next to the taxable amount line.

Using withholding as a tax tool

IRA withholding is treated by the IRS as paid evenly throughout the year, regardless of when it actually occurs. This makes a Q4 RMD with high federal withholding a clean tool to cover an underpayment from earlier in the year — including underpayment created by a Roth conversion or capital gain.

Inherited IRAs and the 10-year rule

Most non-spouse beneficiaries of accounts inherited after 2019 must empty the inherited IRA by December 31 of the tenth year after death. Final IRS guidance (effective 2025) confirms that when the original owner died on or after their Required Beginning Date, those beneficiaries must also take annual RMDs in years 1 through 9, not just a final balloon distribution.

Missed RMD penalty and relief

SECURE 2.0 reduced the excise tax on a missed RMD from 50% to 25%, dropping further to 10% if corrected within a defined correction window. To request a waiver, take the missed RMD, then file Form 5329 with a brief reasonable-cause explanation.

Annual RMD checklist

1. Confirm prior-year December 31 balances for every applicable account.
2. Compute RMD per account using the correct table.
3. Decide on QCDs before the first RMD dollar leaves the account.
4. Coordinate with Social Security, pension, and any planned Roth conversions.
5. Schedule the distribution by mid-December — never the last business day.