Required Beginning Date
The required beginning date (RBD) is the IRS deadline by which a retirement account owner must begin taking required minimum distributions, currently set at April 1 of the year following the year in which the account owner reaches age 73 for most retirement plan types.
The required beginning date is a technical but consequential concept in retirement distribution planning. Tax-deferred retirement accounts such as traditional IRAs, 401(k)s, 403(b)s, and SEP IRAs are intended to fund retirement income, not to serve as indefinite tax shelters or estate planning vehicles. The RBD rule enforces this intent by requiring account owners to begin distributions — and therefore begin recognizing taxable income — no later than a specified deadline.
The SECURE Act of 2019 moved the RBD age from 70½ to 72 for individuals who had not already reached 70½ by December 31, 2019. The SECURE 2.0 Act of 2022 further increased the RBD age to 73 for individuals who reach age 72 after December 31, 2022, and to 75 for individuals who reach age 74 after December 31, 2032. This phased increase reflects Congress's recognition that Americans are living and working longer than when the original rules were established.
The April 1 deadline applies only to the first RMD. All subsequent RMDs for years after the first must be taken by December 31 of the year in which they are due. If an account owner delays their first RMD until April 1 of the year following the year they turn 73, they will be required to take two RMDs in that calendar year — one for the prior year (due by April 1) and one for the current year (due by December 31). This bunching of two distributions in one year can result in a larger taxable income spike and should be evaluated against the alternative of taking the first RMD in the year the owner turns 73.
A significant exception applies to qualified plan participants (such as 401(k) participants) who are still actively employed. Under this exception, an employee who is not a 5% or greater owner of the sponsoring company may delay RMDs from that employer's plan until April 1 of the year following the year of actual retirement, regardless of age. This exception does not apply to IRAs — an IRA owner must begin RMDs at the standard RBD regardless of employment status.
The penalty for failing to take a required minimum distribution was historically 50% of the amount not withdrawn. SECURE 2.0 reduced this excise tax to 25% of the shortfall and further to 10% if the failure is corrected in a timely manner, making the cost of missed distributions somewhat less severe while still maintaining the incentive for compliance.