Retirees Get Tax Breaks with IRA Contributions.

Retirees who turned 72 in 2022 have until April 1 to make their first mandatory retirement plan withdrawal, known as required minimum distributions (RMDs), or face a 25% tax penalty. RMDs apply to pre-tax and Roth 401(k)s, most individual retirement accounts, and other workplace plans. Although Secure 2.0 raised the beginning age for RMDs to 73 starting in 2023, retirees who turned 72 in 2022 still must withdraw the funds by April 1 to avoid the penalty. The penalty for missed RMDs was reduced to 25% from 50% starting in 2023, with the possibility of reducing it further to 10% if you take your missed RMD during the "correction window."