The age at which retirees must begin taking required minimum distributions (RMDs) from their retirement accounts is gradually increasing, which is good news for many high-income retirees concerned about tax implications. RMDs are taxed as ordinary income and can lead to higher taxes on Social Security benefits and increased Medicare costs. Previously set at 70.5 years until 2019, the Secure Act raised the RMD age to 72 in 2020. Secure 2.0 further extended it to 73 in 2023, with plans to increase it to 75 by 2033. This change allows retirees to delay withdrawals, potentially reducing their tax burden. It’s important for those subject to RMDs to stay informed about these changes and plan accordingly to optimize their retirement savings and tax strategies.
QUESTION: How might the increasing RMD age impact the financial planning strategies of future retirees?
5 things to know about required minimum distributions in 2026
