Yes, 73 is the new required minimum distribution age, and it’s remarkable how many advisors—even some at major financial institutions—are getting the rules wrong or failing to communicate them to their clients. Effective January 1, 2023, the SECURE Act 2.0 pushed back the age at which you must begin taking required minimum distributions (RMDs) from your retirement accounts from 72 to 73. If you’re turning 72 after December 31, 2022, this change applies to you. The problem isn’t just the new age; it’s that financial advisors are making critical errors in implementation, leaving retirees vulnerable to IRS penalties and compliance failures.
Consider this scenario: A retiree turns 73 in March 2024. Under the old rules, they would have started RMDs at age 72. Under the new rules, they don’t have to take their first RMD until April 1, 2025—almost two years after turning 73. But many advisors are either still using the old 72-age rule or are confusing the RMD age of 73 with the qualified charitable distribution (QCD) age of 70.5, a separate provision that didn’t change under SECURE 2.0. These mistakes can cost retirees thousands of dollars in penalties and create unnecessary tax complications.
Table of Contents
- What Changed Under SECURE Act 2.0 and When It Took Effect
- Who Is Affected by the New Age 73 RMD Rule
- The Critical Deadlines for Your First and Subsequent RMDs
- How Advisors Are Getting the Rules Wrong
- The Severe Penalties for Missing RMDs
- Managing RMDs Across Multiple Retirement Accounts
- What’s Coming Next: The Age 75 RMD Rule
- Conclusion
What Changed Under SECURE Act 2.0 and When It Took Effect
The SECURE Act 2.0, enacted in late 2022, made a significant change to retirement account rules. The required minimum distribution age—the age at which the IRS mandates that you begin withdrawing money from traditional IRAs, 401(k)s, and similar tax-deferred accounts—increased from 72 to 73. This change became effective on January 1, 2023, and it represents the first time Congress has raised the RMD age in the modern era of retirement account rules. Here’s the critical distinction: the law change applies to individuals who turn 72 after December 31, 2022. This means if you turned 72 in 2022 or earlier, you still follow the old rules and must start RMDs at age 72.
If you turn 72 in 2023 or later, you follow the new rules and must start RMDs at age 73. Many retirees and their advisors are confused about which rule applies to them, particularly those born in late 1950, who turned 72 in late 2022 and must determine whether they’re grandfathered under the old rule or covered by the new one. The reasoning behind the change was straightforward: Americans are living longer, and the government wanted to give retirees additional years to allow their retirement savings to continue growing tax-deferred. However, this seemingly simple change created confusion because financial institutions had to reprogram their systems, and advisors had to communicate the change to clients. Many didn’t, or they communicated it incorrectly.
Who Is Affected by the New Age 73 RMD Rule
If you were born between 1951 and 1959, you’re in the group directly affected by the RMD age change. These cohorts turn 73 between 2023 and 2032, making them the transition generation for this rule change. If you were born in 1950, you already turned 73 and the change doesn’t apply to you; you followed the age-72 rule. If you were born in 1960 or later, you’ll turn 73 starting in 2033 onward, and the age-73 rule will apply to you as the standard rule throughout your retirement. The limitation of the SECURE Act 2.0 RMD change is that it only affects the starting age.
The amount you must withdraw once you start taking RMDs is still calculated using the same IRS life expectancy tables and formulas as before. So while you gain one extra year of tax-deferral opportunity, the distributions you take won’t be any larger or smaller than they would have been under the old rules. Your financial situation at age 73 determines how much you withdraw, not your individual circumstances. It’s also important to understand that this rule applies to nearly all retirement accounts: traditional IRAs, SEP IRAs, SIMPLE IRAs, 401(k)s, 403(b)s, 457 plans, and inherited retirement accounts. The one exception is Roth IRAs, from which the original account owner never has to take RMDs. However, beneficiaries of Roth IRAs do have to take RMDs after inheriting them, and the age-73 rule applies to them as well.
The Critical Deadlines for Your First and Subsequent RMDs
Understanding the RMD deadline structure is essential because missing a deadline carries a severe penalty. Your first required minimum distribution must be taken no later than April 1 of the year following the year you turn 73. Let’s use a concrete example: If you turn 73 in 2025, your first RMD must be taken by April 1, 2026. After that initial distribution, all subsequent RMDs must be taken by December 31 of each year. This means your second RMD in the example above must be taken by December 31, 2026—less than nine months after your first distribution. This compressed timeline for the second RMD catches many retirees off-guard. Some assume that since they have until April 1 for the first RMD, they have until April 1 the following year for the second one.
They don’t. The April 1 deadline applies only to the first RMD. After that, it’s always December 31. An advisor who fails to clearly explain this difference to a client—in writing—is setting that client up for a potential missed deadline and a 25% IRS penalty. The deadline applies to the calendar year in which you turn 73, not to your birth month. If you’re born in November and turn 73 on November 15, 2025, your first RMD is still due by April 1, 2026. You don’t get extra time because your birthday is late in the year. Many clients mistakenly believe they have until their birthday in the following year to take the RMD, which is incorrect and dangerous.
How Advisors Are Getting the Rules Wrong
One of the most common advisor mistakes is confusing the RMD age of 73 with the qualified charitable distribution (QCD) age of 70.5. The QCD is a provision that allows you to donate money directly from your IRA to a qualified charity and satisfy your RMD requirement without including the distribution in your taxable income. The QCD age of 70.5 did not change under SECURE Act 2.0. If you want to use the QCD strategy to reduce your tax burden, you can start at age 70.5 and continue for the rest of your life. But the RMD requirement—the age at which you must begin taking distributions—is 73. Some advisors are telling clients they can delay RMDs until 75 because they’re mixing up different provisions or misunderstanding the legislative language. Another widespread error is that advisors are simply not notifying their clients about the RMD age change at all.
Many clients have received no written notification from their financial institutions or advisors explaining when their RMDs must begin or what deadlines they must meet. This compliance failure leaves retirees to discover the requirement on their own, often by accident when they read an IRS notice or talk to a CPA. Some advisors assume clients will figure it out or that the custodian will handle the notification, creating a gap where the client gets caught in the middle. A third critical mistake occurs when advisors mishandle RMDs across multiple retirement accounts. If you have five or more retirement accounts—which is common for people who’ve changed jobs multiple times or have inherited accounts—you need to carefully coordinate RMD withdrawals. You can aggregate RMDs across IRAs and take the total from one account, but you cannot aggregate 401(k)s with IRAs. Many advisors fail to map out which accounts will be drawn down in which order, leading to incorrect RMD amounts or distributions taken from the wrong accounts entirely.
The Severe Penalties for Missing RMDs
The IRS does not forgive missed required minimum distributions lightly. If you fail to take your full RMD for a given year, the IRS imposes an excise tax of 25% on the amount you failed to withdraw. To illustrate: if your RMD for 2025 is $50,000 and you only withdraw $30,000, you’ve missed $20,000. The IRS will bill you an excise tax of 25% of that $20,000 shortfall, which equals $5,000. You owe this penalty on top of the original $20,000 that you should have withdrawn, and the amount is in addition to regular income taxes on the distribution. The good news is that the penalty can be reduced to 10% if you catch the mistake and correct it within what the IRS generally considers a reasonable timeframe—typically within two years after the RMD was due.
However, this reduced penalty doesn’t apply automatically. You have to file Form 5329 with the IRS requesting a waiver or reduction of the penalty, and you have to demonstrate that the failure was due to reasonable cause. The IRS has broad discretion in determining what constitutes reasonable cause, and “my advisor didn’t tell me” may or may not qualify. The limitation of the penalty reduction is that it’s not guaranteed, and the process of requesting it is cumbersome. Many retirees who miss an RMD simply pay the 25% penalty without realizing they might be able to reduce it. Additionally, if you miss an RMD in multiple years, each year’s shortfall is subject to the 25% penalty independently. For retirees on fixed incomes, this penalty can significantly impact their financial security in a given year.
Managing RMDs Across Multiple Retirement Accounts
Retirees with five or more accounts face a complex RMD compliance situation that many advisors handle poorly. The fundamental rule is that you must calculate the RMD separately for each 401(k), 403(b), 457 plan, and similar employer-sponsored plan. However, you can aggregate all your traditional IRAs, SEP IRAs, and SIMPLE IRAs and take the total RMD from one account if you choose. Here’s a practical example: Suppose you have three traditional IRAs with balances of $200,000, $150,000, and $100,000 at the end of the previous year. You also have a 401(k) from your current employer with $300,000. Your RMD calculation divides the year-end balance of each account by the IRS life expectancy factor for your age. Let’s say your total RMD from the three IRAs is $15,000, and your 401(k) RMD is $10,000.
You can take the full $15,000 from your largest IRA and then take $10,000 from your 401(k). But if you take only $12,000 from your IRA and try to make up the difference from your 401(k), you’ve violated the aggregation rules. Some custodians will flag this; many won’t, leaving you at risk of an IRS penalty. The warning here is that complexity invites error. If you have multiple accounts across different institutions, none of them may have a complete picture of your total retirement assets. Your IRA custodian doesn’t know about your 401(k), and your 401(k) administrator doesn’t know about your IRAs. You become responsible for coordinating the RMD calculation and withdrawals across all accounts, or you must hire a CPA to do it for you. Many retirees assume their custodians will handle this automatically, which is a dangerous assumption.
What’s Coming Next: The Age 75 RMD Rule
The SECURE Act 2.0 changes don’t stop at age 73. Congress included another scheduled increase in the RMD starting age, set to take effect on January 1, 2033. At that time, the required minimum distribution age will jump from 73 to 75. This means individuals who turn 74 after December 31, 2032 will not have to start taking RMDs until age 75, gaining an additional two years of tax-deferred growth.
The phase-in will apply to those born between 1959 and 1960. If you’re born in 1959 and turn 74 on January 15, 2033, you’ll be subject to the new age-75 rule. This forward-looking change suggests that Congress intends to continue raising the RMD age as life expectancies increase, though no further increases beyond 75 have been legislated yet. Financial advisors will need to update their systems and client communications again in 2032 to ensure proper compliance with the new age-75 rule.
Conclusion
The shift of the required minimum distribution age from 72 to 73 under SECURE Act 2.0 was meant to provide retirees with more flexibility and allow their savings to grow longer before they’re required to withdraw. However, the transition has been marred by widespread advisor negligence and confusion, leaving many retirees at risk of costly IRS penalties. The first step you should take is to confirm with your financial advisor or CPA which RMD rules apply to you based on your birth date and current age. If you turn 73 in 2026 or later, the age-73 rule applies, and your first RMD deadline is April 1 of the year after you turn 73. Don’t assume your advisor has it right.
Don’t rely on your custodian to do the math for you. Get clarity in writing from your advisor or a tax professional about your specific RMD amount, deadline, and the accounts from which you should withdraw. If you have multiple retirement accounts, request a written RMD compliance plan that shows which accounts will supply which distributions and when. The cost of a CPA consultation now is far less than the cost of a 25% IRS penalty later. And if you’re approaching age 73, start this conversation immediately—don’t wait until December to discover that your first RMD was due months ago.