SECURE 2.0 RMD Age 73 + Dead Fiduciary Rule: Should You Roll Over Your $850,000 401(k) to an IRA?
SECURE 2.0 RMD Age 73 + Dead Fiduciary Rule: Should You Roll Over Your $850,000 401(k) to an IRA?
You have $850,000 sitting in your former employer's 401(k). You're 65. Your broker calls and recommends rolling it to an IRA — they'll get it set up, no problem. Sounds easy. Sounds helpful.
Here's what that call just got more complicated: the Department of Labor's fiduciary rule died for the second time in March 2026, according to CNBC Personal Finance. That rule would have legally required your broker to act in your best interest when advising you on rollovers. Without it, they're held to a lower "suitability" standard — meaning the advice only has to be suitable, not optimal, for you. And "suitable" is a wide lane when a rollover generates commissions for your advisor.
None of this means you shouldn't roll over. Sometimes you absolutely should. But this is exactly the moment to understand what SECURE 2.0 actually changed about your RMD timeline — and run the numbers before you sign anything.
What SECURE 2.0 Changed (And Most Retirees Still Don't Know)
The SECURE 2.0 Act of 2022 moved the Required Minimum Distribution starting age from 72 to 73 for anyone who turns 73 after January 1, 2023. For people born in 1960 or later, it moves again to age 75.
That's not just a paperwork tweak. It's years of additional tax-deferred compounding — and it changes the calculus on whether you need to access your pre-tax accounts at all in your early retirement years.
Here's what the updated RMD landscape looks like:
| Born | RMD Starts | Years of Extra Deferral vs. Old Age-70½ Rule |
|---|---|---|
| Before 1951 | Already taking RMDs | — |
| 1951–1959 | Age 73 | ~2.5 extra years vs. age 70½ |
| 1960 or later | Age 75 | ~4.5 extra years vs. age 70½ |
SECURE 2.0 also eliminated RMDs for Roth 401(k)s starting in 2024. Previously, Roth 401(k) balances were subject to RMDs — which forced you to take taxable-adjacent distributions even when you didn't need the money. That provision alone is a reason some people should keep their Roth 401(k) in-plan rather than rolling to a Roth IRA (which never had RMDs to begin with).
SECURE 2.0 also slashed the penalty for missing an RMD from 50% to 25% of the missed amount — and down to 10% if corrected within two years. That's meaningful protection against honest mistakes.
The $850,000 Rollover Decision: Staying Put vs. Moving
Let's put real numbers to this. You're 65, with $850,000 in a traditional 401(k). RMDs don't start until 73 — that's 8 years away. You have other income (Social Security, taxable brokerage) to cover living expenses.
Scenario A: Roll over to IRA immediately
Your broker's IRA platform has a 1% annual advisory fee. On $850,000, that's $8,500/year — and it compounds against you. Over 8 years at 7% growth before fees vs. after fees:
- 401(k) stays put (assume 0.10% expense ratio): $850,000 × (1.069)⁸ = ~$1,477,000
- IRA with 1% advisory fee (net 6%): $850,000 × (1.06)⁸ = ~$1,354,000
Difference: ~$123,000 before you've taken a single dollar in distributions. That's not advisory value — that's advisory cost.
This is the kind of analysis Lontevis runs for you — comparing net-of-fee account growth across your specific account types, so you know exactly what a rollover costs before you commit.
When Staying in the 401(k) Actually Wins
Your 401(k) has advantages that your broker won't lead with:
1. ERISA Creditor Protection 401(k) assets receive near-unlimited federal creditor protection under ERISA. IRA assets are protected only up to ~$1.5 million (adjusted periodically) in bankruptcy, and state-law protection varies widely. If you're a business owner, in a litigious profession, or carry personal guarantees, this matters.
2. Rule of 55 Access If you leave your employer at age 55 or older, you can take penalty-free distributions from that employer's 401(k) — even if you're under 59½. Roll it to an IRA and you lose this option permanently.
3. RMD Delay If You're Still Working If you're still employed and don't own more than 5% of the company, you can delay RMDs from your current employer's 401(k) past age 73. IRAs don't get this exception.
When Rolling Over to an IRA Makes Sense
There are real reasons to roll:
Roth Conversion Access. Once in a traditional IRA, you have flexible control to run a Roth conversion ladder — converting specific dollar amounts each year to fill up lower tax brackets. SECURE 2.0's RMD age shift gives you more years in the tax-planning window between retirement and when RMDs force income on you.
For a worked example of this strategy, see our analysis of how a $1.5M IRA generates a $140,000 avoidable tax bill by waiting until RMDs hit at 73 — the math is stark.
Investment Options. Many 401(k) plans have limited, high-fee fund menus. If your plan doesn't offer low-cost index funds, the rollover may justify itself purely on expense ratios.
Simplified RMD Calculation. If you have multiple 401(k)s from different employers, each requires its own RMD calculation. IRA balances can be aggregated — you calculate one combined RMD and pull from any IRA in the pool.
The Inherited IRA Trap Under SECURE 2.0
Here's what SECURE 2.0 didn't fix — and what may affect your estate planning.
The original SECURE Act (2019) replaced the "stretch IRA" — where non-spouse heirs could take distributions over their lifetime — with a 10-year rule: non-spouse beneficiaries must empty inherited IRAs within 10 years of the original owner's death.
What remained confusing for years: did those heirs have to take annual RMDs within the 10-year window, or could they wait and take the whole balance in year 10?
The IRS finally clarified in 2024: if the original owner had already started RMDs, heirs must continue taking annual distributions — they can't just wait and harvest in year 10. This has major tax implications for adult children inheriting large IRAs.
| Scenario | Heir Strategy | Tax Impact |
|---|---|---|
| Parent dies at 75, heir is 45, $600K IRA | Must take RMDs each year + empty by year 10 | ~$60,000/yr added to taxable income |
| Parent dies at 65 (pre-RMD), $600K IRA | No annual RMD required, flexible within 10 years | Heir controls timing, can stack in low-income years |
The difference between these two scenarios, for a beneficiary in the 22% bracket, could be $40,000–$60,000 in total tax savings — simply from when the original owner started RMDs.
If you're doing estate planning and have a large traditional IRA, this is an argument for Roth conversions now. We covered exactly this dynamic in detail in our post on SECURE 2.0 QCD rules and how a $1.5M IRA owner eliminates $28,000 in taxes at 73.
You can model your specific inherited IRA scenario at Lontevis — the 10-year rule math changes significantly based on the original owner's age at death and whether RMDs had begun.
SECURE 2.0's Catch-Up Contribution Upgrade (Ages 60–63)
One more SECURE 2.0 change that gets too little coverage: starting in 2025, workers aged 60, 61, 62, and 63 get a supersized 401(k) catch-up contribution limit.
| Age | Standard Contribution Limit (2025) | Catch-Up Addition | Total |
|---|---|---|---|
| Under 50 | $23,500 | — | $23,500 |
| 50–59 | $23,500 | $7,500 | $31,000 |
| 60–63 | $23,500 | $11,250 | $34,750 |
| 64+ | $23,500 | $7,500 | $31,000 |
For someone in the 24% federal bracket, maxing the age 60–63 catch-up window versus the standard catch-up saves an extra $900/year in federal taxes (the incremental $3,750 × 24%). Over four years, that's a $3,600 tax advantage — plus tax-deferred compounding on the underlying contributions.
If you're in this age window and still working, this is not a rounding error. It's $13,800 in additional pre-tax dollars you can shelter over four years, compounding toward your retirement.
The Fiduciary Gap: What You Need to Do Yourself Now
The death of the DOL fiduciary rule creates a specific vulnerability at exactly the wrong moment: the rollover decision. Rollover IRAs are a major revenue event for brokerage firms. Without fiduciary protection, the burden of evaluation falls back on you.
The questions to ask before any rollover:
- What is the all-in annual cost of the recommended IRA (advisory fee + fund expense ratios) vs. staying in-plan?
- Do I need Rule of 55 access before age 59½?
- Is Roth conversion my priority? If yes, an IRA likely wins — but you need to model the tax brackets first.
- What are my beneficiaries' tax situations? If they're in high-income years when they'll inherit, your Roth conversion strategy may be more important than any account structure.
For a full comparison of how to build a tax-efficient income floor — including when IRA rollovers help and when they don't — see our breakdown of bond ladder vs. dividend income vs. annuity strategies on a $1.2M portfolio.
Your Numbers Are the Variable
The $123,000 fee drag, the $40,000–$60,000 inherited IRA tax swing, the $3,600 catch-up bonus — these are illustrative. Your actual outcomes depend on:
- Your current and projected tax brackets
- Your 401(k) plan's specific fee structure
- Whether you're still working and if the Rule of 55 applies
- Your beneficiaries' income levels and ages
- Whether you've already started Social Security (which affects how much of your RMDs become taxable)
There's no universal answer. But there is a right answer for your specific situation — and it's worth calculating before a broker makes the decision for you.
Run your own rollover vs. stay-put analysis, Roth conversion window, and RMD projection at Lontevis. The SECURE 2.0 rules shifted the timeline in your favor — the only question is whether you use that window deliberately.
Sources
- Retirement saver protection rule has died — for the second time. What it means for investors — CNBC Personal Finance
- More than 7 million student loan borrowers face deadline to leave Biden-era repayment plan. What to know — CNBC Personal Finance
- Hotel vs. Vacation Rental Preferences: Study Reveals Generational Differences — NerdWallet Retirement
- Mortgage Rates Today, Monday, March 30: Record High for 2026 — NerdWallet Retirement
- Nearly 1 in 3 car buyers are underwater on trade-ins — analyst calls dollar amount 'troubling' — CNBC Personal Finance