For decades, retirement savers had to start pulling money out of their tax-deferred accounts not long after they stopped working. A pair of recent laws pushed that starting line back, and it is still moving. The age at which the government requires those withdrawals now depends on the year a person was born, and for many of today’s workers it will not arrive until 75. The shift buys extra years of tax-deferred growth, but it also concentrates a tax bill that eventually comes due.
The new starting ages
The requirement in question is the required minimum distribution, the annual withdrawal the tax code forces from most retirement accounts. The trigger age used to be 70½, then 72, and it has now been split by birth year. Anyone who reached 72 after 2022, generally people born between 1951 and 1959, must begin at 73. Those born in 1960 or later get the longest runway of all, since their required withdrawals do not start until 75.
The change comes from the SECURE 2.0 Act, the retirement law enacted at the end of 2022. The IRS reflects the new schedule in its required minimum distribution guidance, which sets the current starting age at 73 and notes the further move to 75 for the younger group. People born in 1950 or earlier are unaffected; they were already taking distributions under the prior rules and continue on that path.
The first year carries a small timing wrinkle. A retiree reaching the trigger age can delay the very first distribution until April 1 of the following year, but the second one is still due by December 31 of that same year, which means two taxable withdrawals can land in a single tax year. For most people, taking the first distribution in the year they hit the trigger age, rather than deferring it, avoids that pileup.
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Which accounts the rule covers
The requirement reaches most tax-deferred retirement money. Traditional IRAs, SEP and SIMPLE IRAs, and workplace plans such as 401(k), 403(b), and most 457 plans all fall under the rules, which the IRS details in its overview of required minimum distributions. Roth IRAs are the notable exception, carrying no required withdrawals during the original owner’s lifetime, and as of 2024 Roth balances inside workplace plans are exempt during the owner’s life as well.
The amount is recalculated every year. Each distribution is figured by dividing the account’s balance at the end of the prior year by a life-expectancy factor from the IRS tables, so the required share of the account grows as the owner ages. Someone with multiple traditional IRAs can total the required amounts and take the combined sum from any one of them, but workplace plans generally must each pay out their own.
One detail surprises retirees who keep working. A person still employed past the trigger age, who does not own 5 percent or more of the company, can often delay distributions from that current employer’s plan until actually retiring, under what plans call the still-working exception. It does not extend to IRAs or to accounts left with former employers, which must still pay out on schedule, but it can push back the first workplace-plan distribution for someone who stays on the job into their seventies.
The penalty for missing one
The cost of forgetting is steep, which is why the deadlines matter. Failing to take a required distribution triggers an excise tax of 25 percent of the amount that should have come out, a penalty detailed in the IRS material on distributions from retirement accounts. On a required withdrawal of $30,000 that a retiree overlooks, the penalty alone would be $7,500, separate from the ordinary income tax still owed once the money is finally taken.
There is a relief valve. SECURE 2.0 cut the penalty from the 50 percent that applied for years, and it lets a taxpayer who corrects the mistake promptly reduce the charge to 10 percent. Taking the missed distribution and filing the right form within the correction window the law allows is the difference between a painful penalty and a far worse one, but the cleaner course is to calculate each year’s figure and take it on time.
Why a later start is not purely a gift
Pushing the start age to 73 or 75 sounds like an unqualified win, and for tax-deferred growth it often is. But the money in a traditional account has never been taxed, and delaying withdrawals does not cancel that bill; it postpones and can enlarge it. An account left to grow for extra years produces larger required distributions later, and those bigger withdrawals can arrive all at once in a person’s late seventies, potentially pushing them into a higher tax bracket, raising the taxable portion of Social Security, and lifting income-based Medicare premiums.
The size of the eventual distributions is easy to underestimate. Because the required percentage of the account climbs each year and applies to a balance that may have grown untouched for a decade, a retiree who ignored the account entirely can face withdrawals in their late seventies and eighties far larger than anything taken earlier. Those years, not the first one, are often where the tax strain from a big traditional balance actually bites.
That is why some planners use the lower-income years between retirement and the trigger age to convert traditional balances to Roth accounts or take voluntary withdrawals, smoothing the tax hit rather than letting it stack up. The extra years before 73 or 75 are an opportunity as much as a reprieve, and how a retiree uses them can matter more than the delay itself.
Planning around the new timeline
The practical takeaways are straightforward. A retiree should know which starting age applies based on birth year, mark the first deadline and the April 1 wrinkle, and decide whether taking money earlier than required makes sense for the tax picture. The later start ages are a genuine benefit, giving retirement savings more time to compound untouched. But they also mean the eventual reckoning is larger, and the retirees who come out ahead tend to be the ones who treat the delay as time to plan rather than time to ignore the account entirely.
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This article was researched and drafted with AI assistance and reviewed against the linked primary sources.
Warren Cohen is a finance writer based in Phoenix, Arizona, covering personal finance topics including credit, banking, and beginner investing. He earned his degree in business administration from Arizona State University and began his career working in consumer finance, where he gained direct experience with lending and credit systems. He now writes for personal finance websites and fintech platforms, focusing on clear, practical content that helps readers make informed financial decisions.
