High-earning retirees often view required minimum distributions unfavorably because of their significant tax consequences. Because RMDs are taxed as ordinary income, they can trigger secondary financial burdens, such as higher taxes on Social Security benefits and increased Medicare expenses.
Fortunately, the required age to begin these mandatory withdrawals has progressively increased over recent years. Held at 70.5 through 2019, the initial Secure Act shifted the requirement to 72 in 2020. Secure 2.0 subsequently raised the threshold to 73 in 2023, and the starting age is slated to reach 75 beginning in the year 2033.
