How Did SECURE 2.0 Change RMD Rules for U.S. Expats?

The SECURE 2.0 Act (signed December 29, 2022) changed when Required Minimum Distributions begin, how much the penalty costs for missing one, and whether Roth 401(k) accounts require lifetime distributions at all. For expats, these changes create new planning opportunities, especially in low-tax or no-tax countries (IRS: Retirement Plan and IRA Required Minimum Distributions FAQs).

Change 1: RMD starting age increased

Before the original SECURE Act (2019), RMDs began at age 70½. SECURE 1.0 pushed that to 72. SECURE 2.0 pushed it further, on a phased schedule based on birth year:

For example, an expat born in 1955 turns 73 in 2028 and must take their first RMD by April 1, 2029. An expat born in 1962 does not start until they turn 75 in 2037. The first-year exception allows you to delay your initial RMD to April 1 of the following year, but if you do, you must take two RMDs in that second year (the delayed first-year RMD plus the current-year RMD), which can push you into a higher tax bracket.

Change 2: Missed-RMD penalty reduced

The excise tax for failing to take an RMD dropped from 50% to 25% of the shortfall, effective for tax years beginning after December 29, 2022. If you correct the missed RMD within 2 years by taking the distribution and filing Form 5329 with a reasonable cause explanation, the penalty drops to 10%.

For expats, this is significant. Missed RMDs are common when custodians cannot reach account holders abroad, mail notifications are delayed, or time-zone differences cause you to miss a December 31 deadline. The reduced penalty and automatic correction window provide a meaningful safety net.

Change 3: Roth 401(k) lifetime RMDs eliminated

Before 2024, Roth 401(k) accounts required RMDs during the owner’s lifetime, even though Roth IRAs did not. Many expats rolled over Roth 401(k) funds into a Roth IRA to avoid required distributions. Starting January 1, 2024, this workaround is no longer necessary. Roth 401(k) accounts are now treated the same as Roth IRAs for RMD purposes: no distributions required during the owner’s lifetime.

What did not change for expats:

• Traditional IRA and 401(k) RMDs are still taxable as ordinary income on your U.S. return
• Host-country taxation still depends on the applicable tax treaty; many treaties assign pension taxing rights to the residence country
• FTC on Form 1116 still offsets double taxation when both countries tax the distribution
• Inherited IRA rules (the 10-year distribution requirement for most non-spouse beneficiaries) are separate from SECURE 2.0’s RMD age changes and still apply regardless of where you live

For more, see our RMD Calculations for Expats guide.