The authors of the 2019 Secure Act 2.0 made a ridiculous error when they changed the
age for RMDs from age 70.5 to ages 73 and 75.
Here’s how it reads:
- The first RMD age is 73 for those born on or after January 1, 1951 and before
January 1, 1960; and - The first RMD age is 75 for those born on or after January 1, 1959.
Are you able to see the error?
Anyone in 1959 has two first RMD changes. So, we have to ask: should someone born in
1959 take take their RMDs at 73 or 75?
Back in May 2023, four high-ranking members of Congress from both parties sent a letter
to the IRS promising they would introduce legislation to correct this mistake and several
others in SECURE 2.0.
But guess what? This promised corrective legislation hasn’t happened yet. So, the IRS
stepped and to fix the 1959 “ambiguity.”
On July 18, 2024, The IRS said the Secure 2.0 rule should work as follows and RMDs
should begin:
- Age 70 1⁄2 Born before July 1, 1949
- Age 72 Born on or after July 1, 1949 and before January 1, 1951
- Age 73 Born on or after January 1, 1951, and before January 1, 1960
- Age 75 Born on or after January 1, 1960
The problem is that it’s not entirely clear that the IRS has the authority to make the
correction. Earlier this year, the U.S. Supreme Court issued the Loper Bright Enterprises
v. Raimondo decision, which gives judges more power to overturn IRS (and other
governmental) regulations. Based on that decision, it is possible a judge could decide that
only Congress has the power to fix its own mistake.
For now, our best bet is to follow the RMD chart above.
As a side note, this chart does not apply to inherited RMDs; they have a separate set of
rules. Please let us know if you have questions about taxes or wish to explore tax
reduction strategies.
Stay the course … until further notified …
Barbara
1. https://irahelp.com/slottreport/whats-the-first-rmd-year-for-those-born-in-1959/
