In the final days of 2022, Congress passed the SECURE Act 2.0, a broad retirement law designed to expand savings opportunities and give retirement savers more flexibility.
It followed the original SECURE Act of 2019, which also changed several long-standing retirement rules.
Together, these laws affect many areas of retirement planning, including required minimum distributions, inherited retirement accounts, catch-up contributions, employer plans, and charitable giving strategies.
At True North Wealth Management, we help clients understand how these changes may affect retirement income, taxes, charitable giving, and long-term financial planning.
Required Minimum Distributions
Required minimum distributions, or RMDs, are the minimum amounts certain retirement account owners must withdraw each year.
RMD rules generally apply to traditional IRAs, SEP IRAs, SIMPLE IRAs, and many employer retirement plans. These withdrawals are usually taxed as ordinary income.
Roth IRAs do not require lifetime RMDs for the original account owner. Beginning in 2024, designated Roth accounts in employer plans are also no longer subject to lifetime RMDs for the original owner.
The RMD Starting Age Changed
For many years, retirement account owners generally had to begin RMDs at age 70½. The original SECURE Act later moved the starting age to 72.
SECURE Act 2.0 moved the RMD starting age again.
Under current rules, many account owners must begin RMDs when they reach age 73. For younger individuals, the starting age is scheduled to increase to 75 in the future.
The first RMD generally must be taken by April 1 of the year after the year the account owner reaches the applicable RMD age. After that, annual RMDs are generally due by December 31.
Delaying the first RMD until the following April may mean taking two RMDs in one calendar year, which can affect taxable income.
The Penalty for Missed RMDs Was Reduced
Missing an RMD can still be costly.
Before SECURE Act 2.0, the penalty for failing to take the full required amount could be 50% of the shortfall.
SECURE Act 2.0 reduced the penalty to 25%. The penalty may be reduced to 10% if the missed amount is corrected within the required correction window and proper steps are taken.
This lower penalty is helpful, but it does not make RMD deadlines unimportant. Account owners remain responsible for taking the correct amount on time.
Qualified Charitable Distributions May Help
A qualified charitable distribution, or QCD, allows an eligible IRA owner to transfer funds directly from an IRA to a qualified charity.
QCDs can be useful because the distribution may count toward an IRA owner’s RMD, but the amount is generally excluded from taxable income when handled properly.
This can help retirees who want to support charities while also managing adjusted gross income, Medicare income-related surcharges, Social Security taxation, and other tax-related thresholds.
To qualify, the IRA owner must generally be at least 70½ at the time of the distribution. The payment must go directly from the IRA custodian to an eligible charity.
If the IRA owner withdraws the funds personally and then donates them, the transaction does not count as a QCD.
QCD Limits Adjust for Inflation
SECURE Act 2.0 also indexed the annual QCD limit for inflation.
For 2026, eligible individuals may make up to $111,000 in QCDs. Married couples may each use their own limit if each spouse has an eligible IRA and meets the requirements.
QCDs generally may be made from traditional IRAs, inherited IRAs, and inactive SEP or SIMPLE IRAs. They generally cannot be made directly from 401(k), 403(b), or other workplace retirement plans.
Why These Rules Matter
RMDs can affect more than one annual withdrawal.
They may influence:
- Taxable income
- Medicare premiums
- Social Security taxation
- Investment strategy
- Charitable giving
- Roth conversion planning
- Estate planning
- Cash flow in retirement
The SECURE Act 2.0 gave retirees more flexibility in some areas, but it also made retirement distribution planning more important.
Review Your Retirement Income Strategy
The right approach depends on your age, account types, tax situation, charitable goals, income needs, and estate plan.
At True North Wealth Management, we help clients review RMD timing, IRA withdrawals, charitable giving strategies, Roth conversion opportunities, and retirement income decisions in coordination with their tax professionals.
If you are approaching RMD age, already taking RMDs, or giving to charity from retirement accounts, a review may help you avoid mistakes and use the current rules more effectively.
Important Disclosures:
This material is for informational purposes only and is not intended as tax, legal, accounting, charitable, retirement-plan, or individualized investment advice. RMD rules, QCD limits, tax treatment, penalty relief, and retirement account regulations may change. True North Wealth Management does not provide tax or legal advice. Consult qualified tax, legal, charitable, retirement-plan, and financial professionals regarding your circumstances.
The IRS states that RMDs generally begin at age 73 for traditional IRAs, SEP IRAs, SIMPLE IRAs, and retirement plan accounts, and that subsequent RMDs are generally due by December 31 each year. The IRS also confirms the missed-RMD excise tax is generally 25% of the amount not distributed, reduced to 10% if corrected within two years. For 2026, Charles Schwab reports the indexed QCD limit is $111,000 per eligible individual.
Schwab.com, 2026
IRS.gov, 2026
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