Dear Savvy Senior: What are the new rules on required minimum distributions from individual retirement accounts and 401(k)s? I will turn 72 this year and want to be clear on what I’m required to do. — Planning Ahead

Dear Planning: Thanks to the Secure Act 2.0 that was passed by Congress last December, there are several new rules that affect required minimum distributions from traditional IRAs, 401(k)s and other tax-deferred retirement accounts. These changes, which build on the original Secure Act of 2019, are a benefit to retirees by increasing the required distribution age and lowering the penalty for missing a withdrawal. Here’s what you should know.

New rules

As of Jan. 1, 2023, the starting age for taking distributions is now 73, up from 72. And it rises to age 75 in 2033. This change means that if you turn 72 this year, as you stated in your question, you can delay your distributions one more year, allowing your savings in these accounts to grow longer, tax deferred.

But once you turn 73, you must start taking annual distributions from the tax-deferred retirement accounts you own — such as traditional IRAs, simplified employee pension IRAs, savings incentive match plan for employees IRAs, 401(k)s, 403(b)s and 457(b)s — and pay taxes on those withdrawals. Distributions are taxed as ordinary income in your tax bracket.

There are, however, a few exceptions. Owners of Roth IRAs are not required to take a distribution, unless the Roth is inherited. And starting in 2024, Roth 401(k)s will not be subject to required minimum distributions either.

There’s also a work waiver for distributions you should know about. If you are still working beyond age 73, and you don’t own 5% or more of the company you work for, you can delay withdrawals from your employer’s retirement plan until after you retire. But if you have other non- work-related accounts, such as a traditional IRA or a 401(k) from a previous employer, you are still required to take distributions from them after age 73, even if you’re still working.

Deadlines and penalties

Generally, you must take your distribution every year by Dec. 31. First timers, however, can choose to delay taking their distribution until April 1 of the year following the year you turn 73. But be careful about delaying, because if you delay your first distribution, it might push you into a higher tax bracket because you must take your next distribution by Dec. 31 of the same year.

Also note that you can always withdraw more than the required amount, but if you don’t take out the minimum, you’ll be hit with a 25% penalty (it was 50%) on the amount that you failed to withdraw, along with the income tax you owe on it. This penalty drops to 10% if you take the necessary distribution by the end of the second year following the year it was due.

Distribution amounts

Your minimum distribution is calculated by dividing your tax-deferred retirement account balance as of Dec. 31 of the previous year, by an IRS estimate of your life expectancy. A special rule applies if your spouse is the beneficiary and is more than 10 years younger than you.

IRA withdrawals must be calculated for each IRA you own, but you can withdraw the money from any IRA or combination of IRAs. If you own 403(b) accounts, they too allow you to total the distributions and take them from any account or combination of accounts.

With 401(k) plans, however, you must calculate the minimum distribution for each plan and withdraw the appropriate amount from each account.

To calculate the size of your distribution, you can use the worksheets on the IRS website — see IRS.gov/Retirement-Plans and click on “Required Minimum Distributions.” Or contact your IRA custodian or retirement plan administrator who can do the calculations for you.

For more information, see the “Distributions from Individual Retirement Arrangements” (publication 590-B) at IRS.gov/pub/irs-pdf/p590b.pdf.

Jim Miller is a contributor to NBC-TV’s “Today” program and author of “The Savvy Senior.” Send your questions to Savvy Senior, P.O. Box 5443, Norman, OK 73070; or visit savvysenior.org.