What is the required payout age for retirement accounts?

Oct 25, 2025 3 min read •

Finance Retirement Planning Tax Law

Following the SECURE 2.0 Act of 2022, the required payout age for many retirement accounts was increased from 72 to 73, with another increase to 75 scheduled for 2033. However, the exact age and rules depend on the specific account type and your birth year, and not all retirement accounts are subject to these rules.

Quick Summary

The specific age for beginning required payouts from retirement accounts depends on your birth year and the type of account you own. Recent legislation has adjusted these deadlines, impacting individuals with traditional IRAs, 401(k)s, and other tax-deferred plans. Roth accounts typically have different rules. Understanding these regulations is crucial to avoid penalties and plan your withdrawals effectively.

Key Points

RMD Age Changes: For those born between 1951 and 1959, the required minimum distribution (RMD) age is 73; for those born in 1960 or later, it will increase to 75 in 2033.
Roth IRA Exemption: Unlike traditional IRAs and 401(k)s, Roth IRAs do not require the original owner to take RMDs during their lifetime.
Early Withdrawal Penalties: Most retirement accounts impose a 10% penalty on withdrawals taken before age 59 ½, in addition to regular income tax.
Still-Working Exception: Employees working past age 73 may be able to delay RMDs from their current employer's 401(k) until retirement, with an exception for 5% business owners.
Rule of 55: Individuals leaving their job at age 55 or older can make penalty-free withdrawals from that specific employer's retirement plan.
Annual Calculation: RMDs must be calculated and taken each year based on your account balance and IRS life expectancy tables to avoid a 25% penalty.

Required Payout Age: Navigating the SECURE Act

The age at which you must begin withdrawing from your retirement accounts is not a single, fixed number. Recent legislative changes, particularly the SECURE 2.0 Act, have created a tiered system based on your date of birth. For most tax-deferred retirement savings, this mandatory withdrawal, known as a Required Minimum Distribution (RMD), now begins at a later age than in the past.

The current RMD age tiers

Born in 1950 or earlier: Individuals in this group should already be taking RMDs under the previous rules.
Born between 1951 and 1959: Your first RMD is required for the year you turn age 73. The first distribution can be taken as late as April 1 of the following year, but doing so would mean taking two RMDs in the same tax year.
Born in 1960 or later: The age for RMDs will increase to 75. This change takes effect in 2033.

Early withdrawal age versus RMD age

It's important to distinguish between early withdrawal and RMD age. The typical early withdrawal age is 59 ½, before which withdrawals from most retirement accounts may incur a 10% penalty in addition to regular income tax. The RMD age is the point at which the government mandates you to start taking distributions from your account, regardless of your personal financial situation.

Navigating special rules and exceptions

The general RMD rules apply to traditional IRAs, SEP IRAs, SIMPLE IRAs, and most employer-sponsored plans like 401(k)s and 403(b)s. However, several exceptions and special rules exist, making it crucial to understand how your specific situation is affected.

Roth IRAs: Roth IRAs do not have RMDs during the original owner's lifetime. However, beneficiaries who inherit a Roth IRA are subject to RMD rules.
Still-working exception: If you are still employed at age 73 and do not own 5% or more of the company, you may be able to delay RMDs from your current employer's 401(k) plan until you retire. This exception does not apply to IRAs.
Rule of 55: This rule allows individuals who leave their job (retire, quit, or are laid off) during or after the year they turn 55 to take penalty-free withdrawals from that specific employer's 401(k) or 403(b) plan. It does not apply to IRAs or plans from previous employers.
Other exceptions: The IRS provides several other exceptions for penalty-free withdrawals before age 59 ½, such as for disability, significant medical expenses, or for a series of substantially equal periodic payments (SEPP).

Key differences between account types


Feature	Traditional IRA	Roth IRA	Employer-Sponsored Plans (401k, 403b)
Early Withdrawal Age	59 ½ (10% penalty)	Contributions can be withdrawn penalty-free at any time	59 ½ (10% penalty)
RMD Start Age	73 (for those born 1951-1959)	No RMDs during original owner's life	73 (with possible exception for still-working employees)
RMDs for Beneficiaries	Yes, subject to the 10-year rule or other exceptions	Yes, subject to the 10-year rule or other exceptions	Yes, subject to the 10-year rule or other exceptions
Rule of 55 Eligibility	No	No	Yes, if you leave your job in or after the year you turn 55

How to calculate your Required Minimum Distribution

The RMD is calculated annually based on your account balance at the end of the previous year and a life expectancy factor provided by the IRS. You can find the relevant tables in IRS Publication 590-B. It is your responsibility to ensure you take the correct amount on time to avoid penalties. For IRAs, you can aggregate your RMDs from multiple accounts and withdraw the total from one account. For 401(k)s, you must take a separate RMD from each plan.

Conclusion

The required payout age is a critical component of retirement planning that varies significantly depending on your birth year, account type, and employment status. Staying informed about recent legislation, such as the SECURE 2.0 Act, is vital to avoid potential penalties and manage your retirement assets effectively. Whether you are nearing the age for mandatory withdrawals or planning for the future, understanding these rules ensures a smoother and more tax-efficient transition into retirement.

Frequently Asked Questions

A Required Minimum Distribution (RMD) is the minimum amount of money that must be withdrawn from a retirement account each year once the account owner reaches a certain age, as mandated by the IRS.

The SECURE 2.0 Act of 2022 increased the starting age for RMDs. For those born between 1951 and 1959, the age is 73. For those born in 1960 or later, the age will be 75, effective in 2033.

No, the original owner of a Roth IRA is not required to take RMDs during their lifetime. However, beneficiaries who inherit a Roth IRA are subject to RMD rules.

If you fail to take the correct RMD amount on time, the IRS may impose a 25% excise tax on the amount that was not distributed. This can be reduced to 10% if corrected within a certain timeframe.

Yes, if your plan allows, you can delay RMDs from your current employer's 401(k) until you retire, as long as you do not own 5% or more of the company. This exception does not apply to IRAs.

The Rule of 55 is an exception that allows individuals who leave their job during or after the year they turn 55 to take penalty-free withdrawals from their employer's 401(k) or 403(b) plan. This does not apply to IRAs.

While early withdrawals (before age 59 ½) typically incur a 10% penalty, certain exceptions apply, such as for disability, qualifying medical expenses, or for a series of substantially equal periodic payments (SEPP).

Medical Disclaimer

This content is for informational purposes only and should not replace professional medical advice. Always consult a qualified healthcare provider regarding personal health decisions.