With the passage of the Setting Every Community Up for Retirement Enhancement (Secure) Act In 2019, Congress increased the date at which taxpayers must begin taking minimum distributions from traditional retirement accounts from 70.5 to 72. Late in 2022, Congress passed the successor version, known as the Secure 2.0 Act.
Secure 2.0 will gradually increase the age at which required minimum distributions (RMDs) from traditional retirement accounts begin from 72 in 2022 to 73 in 2023. For 2033 and thereafter, the age will increase from 73 to 75.
We asked professors Robert Bloink and William Byrnes, authors of ALM’s Tax Facts with opposing political viewpoints, to share their opinions on Congress’ decision to once again raise the required beginning date for retirement plan distributions.
Below is a summary of the debate that ensued between the two professors.
Their Votes:
Their Reasons:
Byrnes: Americans are living longer than ever before — and they’re also working longer than ever before. Raising the age at which RMDs must begin reflects the reality of retirement in our nation. Taxpayers should have the freedom to choose to leave their hard-earned retirement funds in their accounts while they continue working, so they aren’t burdened with additional taxable income for retirement withdrawals if they haven’t actually retired yet and are still paying taxes at the same rates as during earning years.
Bloink: Raising the required beginning date really only benefits the super-wealthy Americans who can afford to leave their retirement funds in place for an additional three years. It also gives ordinary Americans the idea that it’s always best to defer retirement withdrawals in all situations.