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New RMD Rules: Starting Age, Penalties, Roth 401(k)s, and More

There are some new rules for required minimum distributions (RMDs) from retirement savings accounts (e.g., traditional IRAs and 401(k) plans). President Biden has signed the SECURE 2.0 Act of 2022, which makes significant changes to the way Americans save for and are taxed in retirement. And one of the major areas of focus in the new law is reforming RMDs.

It wasn't all that long ago that the retirement-savings landscape was shaken up. Among other things, the original SECURE Act, which was enacted in 2019, extended the age at which you must start taking RMDs from 70½ to 72. That was a big boost for many seniors, who can now keep money in their tax-free retirement accounts a little longer. But that wasn't enough help for retirees in the eyes of many lawmakers. So, as soon as the ink was dry on the SECURE Act of 2019, a few key members of Congress began planning additional legislation to help more people save for retirement and hold on to their money longer in retirement. Those efforts resulted in the SECURE 2.0 Act of 2022.

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