Over the past five years, retirement savers have seen some of the biggest changes in decades. Between the SECURE Act of 2019, SECURE 2.0 in 2022, and the IRS’s final required minimum distribution (RMD) regulations issued in 2024, the retirement landscape looks very different today.
While many of these updates apply directly to employer-sponsored retirement plans like 401(k)s, the effects spill over into IRAs in meaningful ways. One big reason: rollovers. According to LIMRA, rollovers from workplace retirement plans account for 97% of Traditional IRA contributions. By 2030, retail rollover transactions are expected to top $1 trillion. What happens in the 401(k) world often flows directly into the IRA world.
Below are a few key changes every IRA owner should know.
New Rules for RMD Aggregation
The IRS recently clarified how RMDs work across multiple IRAs.
What hasn’t changed:
If you have more than one Traditional IRA, you can still add up the RMDs for all of them and take that amount from just one account—or spread it out among several. This has always been a helpful option for self-directed IRA (SDIRA) owners whose accounts may hold investments that aren’t easy to liquidate.
What’s new (effective 2025):
If you take money out of an IRA in a year when you owe an RMD, the IRS now treats the entire combined RMD amount for all your IRAs as ineligible for rollover.
Example – old rule: Jennifer owned three Traditional IRAs, each with a $1,000 RMD. If she withdrew $10,000 from one IRA, she could roll over $9,000 because only $1,000 counted as the RMD (which is not eligible for rollover).
Example – new rule (effective 2025): Using the same scenario, Jennifer can now roll over only $7,000. Her $10,000 withdrawal is treated as satisfying all three RMDs ($3,000 total). Rolling over $9,000 would create a $2,000 excess contribution, which must be corrected to avoid penalties.
Why this matters:
This change could catch IRA owners off guard. If you’re planning withdrawals or rollovers, it’s important to know how the new aggregation rule works so you don’t accidentally exceed the rollover limit.
RMDs After Death: More Flexibility for Beneficiaries
Another update gives beneficiaries more flexibility when an IRA owner passes away.
In the past, if the IRA owner hadn’t taken their RMD for the year, each beneficiary had to take a portion based on their share of the account. This sometimes caused issues if one beneficiary was unavailable or unwilling.
The new rule: Now, any beneficiary can take the full RMD for the year of death on behalf of all beneficiaries. This simplifies the process and helps families avoid unnecessary complications. Beneficiaries also have more time—the later of their own tax return due date (with extensions) or the end of the year following the IRA owner’s death.
Employer-Sponsored Plan Changes That Could Impact IRA Owners
Two changes from the SECURE Acts may not directly target IRAs but could affect IRA balances down the road:
Bigger Catch-Up Contributions to Plans
- If you’re age 50 or older, you can already make extra contributions (7,500 in 2025).
- Starting in 2025, those aged 60–63 can contribute 50% more as a “special catch-up.” For a 62-year-old in a 401(k), that means $11,250 in catch-up contributions—on top of the $23,500 regular deferral limit.
Some Catch-Ups Must Be Roth
- Beginning in 2026, anyone earning more than $145,000 in the prior year must make their catch-up contributions as Roth (after-tax) rather than pre-tax.
- This may lead some savers to adjust how they use IRAs—deciding whether Traditional or Roth contributions make the most sense for their overall tax situation.
What This Means for SDIRA Owners
So, what does all this mean if you own a self-directed IRA?
- Higher savings potential today = larger IRA balances tomorrow. If you’re still working, the higher plan limits could help you grow your retirement assets, which you may eventually roll into an IRA.
- Avoid rollover mistakes. Be mindful of the new RMD aggregation rules before moving money between accounts.
- More flexibility for loved ones. The updated beneficiary rules may make it easier for your heirs to manage inherited IRAs.
STRATA Trust Company is a directed IRA custodian. We do not provide tax, legal, or investment advice. The information above is for educational purposes only and should not be considered a substitute for professional guidance. Our SDIRA experts can point you in the right direction, but before making decisions about rollovers, contributions, or distributions, you should consult with a qualified financial, tax, or legal professional who can provide advice specific to your situation.
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