![]() Starting in 2023, you can now wait until 73, and in 2033 this will increase to 75. ![]() ![]() Before the legislation was signed into law, you were required to start making retirement withdrawals at 72. SECURE 2.0 was signed into law in late 2022 and is one of the most significant pieces of retirement legislation. Once you start taking RMDs, your withdrawals will be taxed as ordinary income. You’re required to start taking RMDs from your 401(k) when you reach age 72 (unless you’re still working, under some plans). When do I have to start making withdrawals from my 401(k)? If you need access to your funds before then, you can make an early withdrawal, but you’ll incur an additional 10% early withdrawal tax penalty, unless an exception applies. With a 401(k), you can start to make penalty-free withdrawals when you turn 59 ½. When can I start withdrawing money from my 401(k)? Your money grows tax-free, since contributions are made from after-tax dollars, and your withdrawals in retirement aren't taxed. If you fail to make withdrawals that meet the RMD standards, you may be subject to a 50% excise tax. You can withdraw more than the RMD amount, but withdrawals from a Traditional IRA are included in your taxable income. The amount that you’re required to withdraw is called a required minimum distribution (RMD). Roth IRAs, however, don’t require withdrawals until the owner of the account dies. Generally, you’re required to start taking withdrawals from your traditional IRA when you reach age 72 (unless you’re still working, under some plans). You can’t keep your funds in a retirement account indefinitely. When do I have to start making withdrawals from my IRA? If you need to access your funds before then, you can make an early withdrawal, but you’ll incur an additional 10% early withdrawal tax penalty, unless an exception applies. You can start to make penalty-free withdrawals from your IRA when you turn 59 ½. When can I start withdrawing money from my IRA? Particularly, withdrawals from 401(k)s are very different Traditional and Roth IRAs. Each kind of retirement savings account has its own withdrawal rules.
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