New IRA Rules: Contribution Limits, RMD Ages, and Inherited IRAs

The rules for putting money into an IRA and pulling it back out have shifted meaningfully since the SECURE 2.0 Act took effect, and the 2026 IRS inflation adjustments push several of the numbers up again. The new IRA rules for contributions and RMDs raise the annual contribution ceiling to $7,500, delay the age at which you must start taking required minimum distributions to 73 (rising to 75 in 2033), and cut the penalty for a missed distribution from 50% to 25%, or 10% if you correct it quickly.

How Much You Can Contribute in 2026

The annual IRA contribution limit for 2026 is $7,500, up from $7,000 in 2024 and 2025. If you’re 50 or older, you can add a $1,100 catch-up contribution, for a total of $8,600.¹

These limits apply to the total you put across all your IRAs combined, not per account. Employer plans like 401(k)s and SIMPLE IRAs have their own separate limits and rules and aren’t governed by the IRA ceiling.

Roth IRA Income Limits for 2026

Whether you can contribute directly to a Roth IRA depends on your modified adjusted gross income. For 2026:

Single filers and heads of household: full contribution below $153,000, phase-out from $153,000 to $168,000, no direct contribution at $168,000 or above.
Married filing jointly: full contribution below $242,000, phase-out from $242,000 to $252,000, no direct contribution at $252,000 or above.
Married filing separately (if you lived with your spouse at any point in the year): phase-out from $0 to $10,000.

Traditional IRA contributions have separate deductibility phase-outs when you or your spouse are covered by a workplace plan, but the $7,500 contribution limit itself applies regardless of income.

Required Minimum Distribution Ages

SECURE 2.0 delayed the age at which you have to start pulling money out of traditional IRAs and other tax-deferred accounts. If you turned 72 after December 31, 2022, your RMD age is 73 rather than 72. That covers people born between 1951 and 1959.²

A second bump is already scheduled. Starting in 2033, the RMD age rises to 75 for anyone born in 1960 or later. If you were born in 1959, you’re in the last group required to begin distributions at 73. If you were born in 1960, your first RMD isn’t due until 2035. That two-year gap can leave a meaningful amount of money growing tax-deferred, especially in larger accounts.

Roth IRAs remain exempt from RMDs during the original owner’s lifetime. The requirement applies to traditional IRAs, SEP IRAs, SIMPLE IRAs, and most employer plans.

The Penalty for a Missed RMD

Failing to take an RMD used to trigger a 50% excise tax on the amount you should have withdrawn. SECURE 2.0 cut that to 25%. If you correct the shortfall and file the appropriate return within roughly two years, the penalty drops further to 10%.³ In practical terms, a forgotten $20,000 RMD that used to cost $10,000 now costs $5,000 at most, and $2,000 if you catch it promptly.⁴

Qualified Charitable Distributions

Once you turn 70½, you can transfer money directly from an IRA to a qualified charity and exclude that amount from taxable income. The annual limit is indexed for inflation for the first time under SECURE 2.0. For 2026, the cap is $111,000 per taxpayer. A separate one-time provision allows a transfer of up to $55,000 to a charitable remainder trust or charitable gift annuity.⁵ A qualified charitable distribution can count toward your RMD for the year, which is why it matters for anyone already subject to required withdrawals.

Inherited IRA Rules

The rules for IRAs you inherit are among the most confusing in the tax code, and SECURE 2.0 added complexity on top of the original SECURE Act. How they apply depends on your relationship to the person who died and when they passed away.

The 10-Year Rule for Most Non-Spouse Beneficiaries

If you inherited an IRA from someone who was not your spouse and who died in 2020 or later, you generally have to empty the account by the end of the 10th year after the year of death. The old stretch IRA strategy, which spread distributions over a beneficiary’s own lifetime, no longer applies to most inheritors.⁶

Whether you also owe annual withdrawals during those 10 years depends on whether the original owner had already started taking RMDs:

Owner died before reaching RMD age: you can withdraw on any schedule you want, as long as the account is fully distributed by the end of year 10.
Owner died after reaching RMD age: you must take annual distributions in years one through nine, with the remainder due in year 10.

This distinction trips up a lot of beneficiaries, and missing an annual distribution can trigger the 25% excise tax on the shortfall.

Certain beneficiaries are exempt from the 10-year rule and can still use life-expectancy payouts: surviving spouses, minor children of the original owner (until they reach the age of majority), individuals who are disabled or chronically ill, and beneficiaries no more than 10 years younger than the deceased owner.⁶

A New Election for Surviving Spouses

Surviving spouses have a new option under SECURE 2.0. Instead of rolling an inherited account into your own IRA, you can elect to be treated as though you were the deceased account holder for distribution purposes. That lets you delay RMDs until the year your deceased spouse would have reached their required beginning age, which can add years of tax-deferred growth if you’re younger than they were.⁷

The election is irrevocable. Distribution amounts are calculated using the Uniform Lifetime Table rather than the Single Life Expectancy Table, which generally produces smaller required withdrawals. This option is available for accounts inherited after December 31, 2023. It differs from a standard spousal rollover because the account effectively stays in the deceased spouse’s name while you control the timing.

529 Plan Rollovers Into a Roth IRA

SECURE 2.0 opened a narrow path for moving leftover education savings into retirement savings. If a child finishes school with money remaining in a 529 plan, the beneficiary can roll those funds into a Roth IRA rather than taking a taxable withdrawal. The rules are strict:

The 529 account must have been open for at least 15 years.
Contributions made in the most recent five years, and earnings on those contributions, cannot be rolled over.
The 529 beneficiary must be the same person who owns the receiving Roth IRA.
There is a lifetime cap of $35,000 per beneficiary across all such rollovers.

Each year’s rollover counts against the annual Roth IRA contribution limit, which is $7,500 for 2026. Fully moving $35,000 therefore takes at least five years, and you can’t make regular Roth IRA contributions in any year you use the full limit for a 529 transfer.¹ Some states that offer a tax deduction for 529 contributions may recapture that deduction when funds move to a Roth IRA, so check your state’s treatment before you initiate the transfer.

Penalty-Free Early Withdrawal Exceptions

SECURE 2.0 added several exceptions to the 10% early withdrawal penalty that applies before age 59½. Income tax on traditional IRA distributions still applies, but avoiding the penalty makes withdrawals significantly less expensive during a genuine emergency.

You can take one penalty-free distribution per calendar year for emergency personal or family expenses. The maximum is the lesser of $1,000 or the amount by which your vested account balance exceeds $1,000. If your account holds $1,400, you can only withdraw $400 penalty-free under this provision. You have three years to repay; without repayment, you can’t use this exception again until you repay or three years have passed.⁸

Victims of domestic abuse by a spouse or domestic partner can withdraw the lesser of $10,000 (indexed for inflation) or 50% of the vested account balance without the 10% penalty, within one year of the abuse occurring. You self-certify eligibility; no police report or court order is required.⁹

If a physician certifies that you have an illness or condition reasonably expected to result in death within 84 months, you can withdraw any amount without the early distribution penalty. The 84-month window is notably longer than the 24-month standard used for terminal illness elsewhere in the tax code.¹⁰

For any of these exceptions, you may need to file Form 5329 with your tax return if your Form 1099-R doesn’t already reflect the correct exception code.¹¹

1
Internal Revenue Service. 401(k) Limit Increases to $24,500 for 2026, IRA Limit Increases to $7,500
2
Internal Revenue Service. Notice 2023-23 – Relief for Reporting Required Minimum Distributions for IRAs for 2023
3
Office of the Law Revision Counsel. 26 USC 4974 – Excise Tax on Certain Accumulations in Qualified Retirement Plans
4
Internal Revenue Service. Retirement Plan and IRA Required Minimum Distributions FAQs
5
Internal Revenue Service. Notice 2025-67 – 2026 Amounts Relating to Retirement Plans and IRAs
6
Internal Revenue Service. Retirement Topics – Beneficiary
7
Internal Revenue Service. Internal Revenue Bulletin 2024-33
8
Internal Revenue Service. Retirement Topics – Exceptions to Tax on Early Distributions
9
Internal Revenue Service. Topic No. 557, Additional Tax on Early Distributions From Traditional and Roth IRAs
10
Legal Information Institute. 26 USC 72(t)(2) – Terminally Ill Individual Definition
11
Internal Revenue Service. Instructions for Form 5329