The RMD Trap Nobody Talks About
Photo by Mark Stebnicki
Retirement isn’t just numbers. It’s about control, freedom, and living life on your terms. SECURE 2.0 gives you more choices with RMDs but only if you plan ahead.
Are Required Minimum Distributions still a trap?
Picture your retirement savings as a tree. You’ve nurtured it for decades. Then the IRS says, “Take this fruit whether you want it or not.” That’s an RMD.
SECURE Act 2.0 pruned the rules. And if you understand them, you can let the tree grow longer and stronger.
The challenge: RMDs can bite you with taxes, mistakes, and missed opportunities. Many retirees aren’t aware of the changes or the strategies that keep control in your hands.
Source: IRS Retirement Topics – RMDs
What changed under SECURE 2.0?
1. Age matters
RMDs start at 73 for those turning 73 in 2023 or later.
By 2033, it rises to 75.
More years = more growth, more freedom, fewer forced withdrawals.
2. Penalties are friendlier
Missed an RMD? Fine drops from 50% to 25%.
Fix it within two years? Penalty drops to 10%.
3. Roth accounts break free
Roth 401(k)s are now exempt from RMDs starting 2024.
Your Roth grows quietly, tax-free, for your lifetime.
Sources:
How can you avoid the RMD trap?
These aren’t hacks, they’re freedom strategies. Results vary; consult a professional.
Roth conversions – Pay the tax now, remove RMDs later. Your money grows uninterrupted.
Qualified Charitable Distributions (QCDs) – Age 70½+? Donate directly from your IRA. Reduce taxable income and make an impact. (2025 limit: $108,000. IRS Notice 2023-75)
Strategic withdrawals – Take money before RMD age. Spread taxable income across years. May keep you in a lower bracket.
Delay Social Security – Smaller taxable income early = bigger IRA withdrawals later. (SSA guidelines)
Qualified Longevity Annuity Contracts (QLACs) – Put up to $200,000 into a longevity annuity. RMDs pause until 85. Guaranteed income later.
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Common mistakes to dodge
Wrong calculations – Always use correct life expectancy tables.
Missed deadlines – First RMD by April 1 after turning 73, then Dec 31 every year.
Mixing accounts – RMDs must be calculated separately by account type.
Inherited IRA rules differ – Beneficiaries have unique requirements.
Why this matters for your wealthspan
Every unnecessary tax dollar is freedom lost. Every misstep shrinks your options. SECURE 2.0 gives you choices: grow longer, plan smarter, live fully. Your wealth isn’t just money—it’s the life you want to lead.
Start your next chapter
Rules changed. Your plan should too. Take control. Reduce taxes. Extend your wealthspan.
Schedule a strategy session today and make RMDs work for your life not against it.
Curious how this applies to your life?
A Wealthspan Review™ is a calm, no-pressure conversation to understand where you stand—and whether working together makes sense.
Explore Your Wealthspan Review™Disclaimer: The information provided is for educational purposes only and does not constitute investment, tax, or financial advice. Consult with a licensed professional before making financial decisions.
Reference Sources:
IRS - SECURE 2.0 Act Overview
IRS - RMD Comparison Table
U.S. Congress - SECURE 2.0 Act Text
