New RMD Rules Explained for Texas Retirees

New RMD Rules Are Here: What the Latest IRS Guidance Means for You

In July 2024, the IRS released long-awaited final regulations under the original SECURE Act along with proposed regulations under SECURE 2.0. These updates bring much-needed clarity to required minimum distribution (RMD) rules that have caused years of confusion—especially for beneficiaries of inherited retirement accounts.

Some of the rules can be relied upon immediately as guidance, while others become fully effective in 2026. Together, they significantly impact how retirement accounts, inherited IRAs, trusts, and spousal beneficiaries should be planned going forward.

Below, we break down the most important changes—and what they may mean for your retirement and legacy planning.

Video Summary Here

1. The 10-Year Rule and Annual RMDs: Still in Force

One of the most controversial interpretations of the SECURE Act—the “at least as rapidly” rule—has been officially retained.

If a retirement account owner dies on or after their Required Beginning Date (RBD), beneficiaries subject to the 10-year rule must:

• Take annual RMDs during the 10-year period, and
• Fully empty the account by the end of year 10

Due to widespread confusion, the IRS previously waived penalties for missed beneficiary RMDs for 2021–2024. That relief period is ending.

Starting in 2026, annual RMDs are required. Missed RMDs from prior years do not need to be made up, and the 10-year clock was not extended.

Planning Insight: Many beneficiaries already withdraw more than the annual RMD each year. For them, this rule may not materially change their strategy. However, beneficiaries who delay distributions may face a large tax bill in year 10. In many cases, effective planning means thinking beyond the “minimum” and focusing on the most tax-efficient withdrawal strategy over the entire 10-year period.

2. Expanded Definition of Eligible Designated Beneficiaries (EDBs)

The new regulations broaden who qualifies as an Eligible Designated Beneficiary, allowing more individuals to stretch distributions over life expectancy rather than being forced into the 10-year rule.

• Minor children now include stepchildren, adopted children, and eligible foster children
• Individuals deemed disabled under Social Security standards qualify under a new safe-harbor rule
• A special definition of disability applies for children under age 18

Notably:

• IRA beneficiaries are not required to provide disability or chronic illness documentation
• Plan beneficiaries must still provide documentation, but it does not need to be overly detailed
• For deaths occurring between 2020–2023, documentation is not required until October 31, 2025

Planning Insight: These changes make it easier for more beneficiaries to qualify as EDBs—opening the door to more favorable distribution options and long-term tax planning opportunities.

3. Year-of-Death RMD Deadline Extended

The final regulations confirm that when a retirement account has multiple beneficiaries:

• Any beneficiary may take the year-of-death RMD the owner did not complete, and
• The deadline is extended to the end of the calendar year following the year of death

Planning Insight: This added flexibility can be especially helpful when an account owner dies late in the year, when beneficiaries are overwhelmed, or when one beneficiary—such as a charity—takes a lump-sum distribution that satisfies the RMD for all.

4. Concurrent RMD Monitoring Eliminated

Earlier proposed regulations required some beneficiaries—often elderly—to track multiple life expectancies at the same time. This complex requirement has been eliminated.

Planning Insight: Removing this rule significantly simplifies ongoing RMD compliance for older beneficiaries.

5. Hypothetical RMD Rule for Spouses: Loophole Closed

The IRS retained rules preventing surviving spouses from avoiding RMDs by electing the 10-year rule and later completing a spousal rollover.

Any “hypothetical RMDs” that would have been required must now be taken before a spousal rollover occurs.

Planning Insight: This confirms the IRS’s commitment to enforcing annual RMD requirements and closes a previously available planning workaround.

6. Trusts as Beneficiaries: Rules Loosened

While trusts are generally less favorable as retirement account beneficiaries after the SECURE Act, the new regulations provide clarity:

• IRA custodians no longer require trust documentation to satisfy see-through rules
• Plan administrators may request either the trust document or a beneficiary summary
• RMD rules can be applied separately to sub-trusts created immediately upon death

Planning Insight: Each sub-trust may now qualify for the most favorable payout option without being individually named on the beneficiary form.

7. Clarified Rules for Spouse Beneficiaries Under SECURE 2.0

SECURE 2.0 allows a surviving spouse to be treated as the deceased employee for RMD purposes when the account owner dies before their RBD.

• RMDs may be delayed until the deceased spouse would have reached RMD age
• RMDs are calculated using the Uniform Lifetime Table and the surviving spouse’s age
• The account remains inherited, avoiding the 10% early-withdrawal penalty
• A spousal rollover can still be completed later

Planning Insight: This clarification allows many surviving spouses to delay RMDs for years and take smaller distributions than under prior rules.

8. RMD Starting Age for Those Born in 1959 Clarified

The proposed regulations resolve uncertainty caused by a drafting error in SECURE 2.0.

• Age 72: Born 1950 or earlier
• Age 73: Born 1951–1959
• Age 75: Born 1960 or later

Final Thoughts: Compliance Is Only the Starting Point

These new RMD rules provide clarity—but they also introduce complexity. The difference between simply following the rules and proactively planning distributions can be substantial over time.

Download our guide, “New RMD Rules Are Here,” for a practical checklist and deeper insight into how these changes may affect inherited IRAs, spousal planning, and trust strategies.

If you would like help reviewing how these rules apply to your situation or want to update your retirement plan, we’re here to help. At RFG Wealth Advisory in Argyle, Texas, we help retirees and families across North Texas navigate complex retirement distribution rules with clarity and confidence.

Call us at 940-464-4104
Schedule a free virtual consultation here.

RFG Wealth Advisory is an independent, fee-only Registered Investment Advisor firm based in Argyle, Texas. Investment advice is offered through RFG Wealth Advisory, a Registered Investment Advisor.

Investment advice is offered through RFG Wealth Advisory, a Registered Investment Advisor.