The SECURE Act & Your Retirement Taxes: What’s Changed (and What to Do About It)
- Sofia Aguilera
- Jul 3
- 3 min read
The retirement‑savings landscape has been redrawn twice in just a few years—first by the original SECURE Act of 2019 and now by SECURE 2.0, signed in late 2022. Together these laws overhaul the rules for Required Minimum Distributions (RMDs), Roth accounts, annuities and more, with ripple effects on the taxes you’ll pay in retirement. Below is a practical guide from Avalon Tax & Financial Services on what’s new, why it matters, and the smart moves to consider before your next tax season.
1. The RMD Clock Now Starts Later
Age 73 today, age 75 by 2033. SECURE 1.0 bumped the first‑RMD age from 70½ to 72, and SECURE 2.0 raised it again to 73 for anyone born in 1951‑1959. Beginning in 2033, the trigger age jumps to 75. kiplinger.com
Planning edge: Two‑plus extra years of tax‑deferred growth can be huge. Use that window to front‑load Roth conversions (taxed now, grow tax‑free later) or harvest long‑term capital gains while your marginal rate is lower.
2. The Bite for Missing an RMD Is Smaller
The once‑frightening 50 % penalty on a missed distribution is now 25 %, and drops to 10 % if you correct the error by the end of the second following year. kiplinger.comstwserve.com
Avalon tip: If you discover a mistake, file IRS Form 5329 alongside a quick catch‑up withdrawal and a short letter of explanation. The IRS routinely waives the penalty when you act promptly and in good faith.
3. Roth 401(k)s Finally Get RMD Parity
Starting in 2024, employer Roth accounts no longer require lifetime RMDs—mirroring Roth IRAs. kiplinger.comfidelity.com
Why it matters: Many savers hesitated to use a Roth 401(k) because it forced withdrawals later on. With that obstacle gone, high‑income earners can stash even more tax‑free dollars at work without worrying about forced distributions.
4. Bigger, Simpler QLACs (Longevity Annuities)
You may now shift up to $200,000 (indexed annually) from your IRA/401(k) into a Qualifying Longevity Annuity Contract without triggering RMDs, and the old 25 %‑of‑assets cap is gone. investopedia.com
Use‑case: A QLAC can create a guaranteed income stream beginning as late as age 85, reducing RMDs in your 70s and 80s while hedging longevity risk. For charitably inclined clients, pairing a QLAC with Qualified Charitable Distributions (QCDs) can be a tax‑efficient one‑two punch.
5. New Relief for Spousal Beneficiaries
Under SECURE 2.0, a surviving spouse who inherits an IRA may elect to be treated as the deceased account owner, delaying RMDs until the deceased would have turned RMD age and then using the spouse’s own (usually younger) life‑expectancy table. kitces.com
Planning insight: This new option can significantly lower the surviving spouse’s taxable income during the first years of widowhood—often a period when Social Security is still partially taxed and medical expenses may rise.
6. Inflation‑Indexed Charitable Gifts
The annual cap on Qualified Charitable Distributions (direct gifts from your IRA at age 70½+) is now indexed for inflation—$108,000 in 2025—and you get a one‑time $54,000 “booster” contribution through certain charitable vehicles. kiplinger.com
Tax angle: QCDs can satisfy part or all of your RMD while keeping the distribution out of adjusted gross income—avoiding the Medicare‑IRMAA surtax and boosting deductions tied to AGI.
Action Checklist for 2025 Filers
Bottom Line
The SECURE Act’s two‑part makeover of retirement law gives you more flexibility but also new tax traps if you leave accounts on autopilot. Whether it’s timing Roth conversions, sizing a QLAC, or syncing RMDs with charitable goals, the smartest play is a coordinated plan—not a last‑minute scramble.
Ready to see how the new rules shape your personal retirement tax picture? Schedule a complimentary strategy session with Avalon Tax & Financial Services today, and let’s turn legislative change into lasting tax savings.
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