The Internal Revenue Service (IRS) and U.S. Treasury Department have issued long-awaited final regulations on required minimum distributions (RMDs) from qualified plans and IRAs, aligning with changes from the SECURE Act of 2019 (SECURE Act) and the SECURE 2.0 Act of 2022 (SECURE 2.0).

The finalized regulations will apply on Jan. 1, 2025. Along with the final regulations, Treasury and the IRS also released proposed regulations addressing certain SECURE 2.0 provisions requiring further public input.

The final regulations generally reflect amendments to the RMD rules Congress made as part of the SECURE Act. They also reflect some provisions from SECURE 2.0, which were not reflected in the 2022 proposed regulations.

Key updates in the final rule include:

• 10-Year Rule: Retains the 10-year rule — a rule that says all the remaining money in a retirement account must be distributed within 10 years after the person dies — interpretation for designated beneficiaries, requiring RMDs to continue during the 10-year period in some cases.

• RMD Age Increase: Reflects the new starting age for RMDs. SECURE 2.0 included language that made it unclear at what age people born in 1959 need to start taking money out of their accounts. The new proposed regulations make it clear that for people born in 1959, the applicable age is 73.

• Surviving Spouses: Allows surviving spouses to use the Uniform Lifetime Table for calculating their RMDs as beneficiaries.

• In-Plan Roth Accounts: Exempts in-plan Roth accounts from lifetime RMDs.

• Annuity Payment Reforms: Eliminates barriers for increasing annuity payments.

• Qualifying Longevity Annuity Contracts: Updates premium limits and clarifies rules post-divorce.

• Partial Annuitization: Introduces new rules for partial annuitization.

For more information on SECURE 2.0 or other retirement policy issues, contact Erica McFarquhar, Deputy General Counsel, or Irica Solomon, Head of Government Affairs.