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What's in the SECURE Act 2.0? Thumbnail

What's in the SECURE Act 2.0?

On December 23, 2022, Congress passed a new set of retirement rules designed to make it easier to contribute to retirement plans and access funds earmarked for retirement.

The law is called the SECURE Act 2.0 and is a follow-up to the Setting Every Community Up for Retirement Enhancement (SECURE) Act, passed in 2019. The 4100-page bill provides more incentives and opportunities to encourage retirement savings.

The comprehensive legislation has many retirement-related provisions. We’ve identified some of the major updates and broken them down into four sections for simplicity.


The Required Minimum Distribution (RMD) age will rise from 72 to 73 beginning in 2023. One of the most important changes the SECURE Act 2.0 makes is increasing the age at which owners of retirement accounts must begin taking RMDs. And starting in 2033, the RMD age will change to 75. 

If you have already turned 72, you must continue taking distributions. But if you turn 72 in 2023 and have already scheduled your withdrawal, you may want to revisit your approach.

Qualified Charitable Donations (QCD). Even though RMD dates have been changed, you can still make QCDs out of your retirement accounts at age 70 ½.   The income will be excluded from your taxable adjusted gross income, Social Security tax, and Medicare surcharge calculations. Beginning in 2024, the maximum QCD you can make (currently $100,000) will increase with inflation.  Also, you will have a one-time opportunity to use a QCD to fund up to $50,000 with certain charitable giving.

Penalty reduced. Starting in 2023, if you miss an RMD for some reason, the penalty tax drops to 25% from 50%. If you fix the mistake promptly, the penalty may drop to 10%.

Easier access to funds. In emergencies, plan participants can access retirement funds without penalty or fees. For example, starting in 2024, an employee can get up to $1,000 from a retirement account for personal or family emergencies. Other emergency provisions exist for terminal illnesses and survivors of domestic abuse.

Aligned RMD rules. In 2024, RMDs will be eliminated from employer-sponsored Roth accounts, such as Roth 401(k)s and Roth 403(b)s, to align with the individual Roth IRA rules

Enhanced RMDs for Surviving Spouses.  Surviving spouses can elect to determine the RMD date as though they were the deceased spouse, even delaying RMDs if the deceased spouse was younger.


Catch-Up Contributions. Beginning January 1, 2025, investors aged 60 through 63 can make larger catch-up contributions of up to $10,000 annually to workplace retirement plans. The catch-up amount for people aged 50 and older in 2023 is $7,500. However, the law applies certain stipulations to individuals earning more than $145,000 annually.

Automatic Enrollment. Beginning in 2025, the Act requires employers to enroll employees in workplace plans automatically. However, employees can choose to opt out.

Student Loan Matching. In 2024, companies can match employee student loan payments with retirement contributions. The rule change offers workers an extra incentive to save for retirement while paying off student loans.


529 to a Roth. Starting in 2024, pending certain conditions, individuals can roll a 529 education savings plan into a Roth IRA. This means that if your child or grandchild receives a scholarship, goes to a less expensive school, or doesn't go to school, the money can get repositioned into a retirement account. However, rollovers are subject to the annual Roth IRA contribution cap and are limited to a maximum of a $35,000 lifetime transfer amount. Also, the 529 plan must have been maintained for at least 15 years or longer.  

Roth IRA distributions must meet a five-year holding requirement and occur after age 59½ to qualify for the tax-free and penalty-free withdrawal of earnings. Tax-free and penalty-free withdrawals are allowed under certain other circumstances, such as the owner's death. The original Roth IRA owner is not required to take minimum annual withdrawals.

New Roth SIMPLE and Roth SEP IRAs. Starting in 2023, employers can make Roth contributions to Savings Incentive Match Plans for Employees (SIMPLE) or Simplified Employee Pensions (SEP).


Support for Small Businesses. In 2023, the new law will increase the business credit to help with the administrative costs of setting up a retirement plan. The credit increases from 50% to 100% for businesses with less than 50 employees. By boosting the credit, lawmakers hope to remove one of the most significant barriers for small businesses offering a workplace plan.

A litany of retirement plan-related changes. The many changes will, for the most part, affect plan administrators though others will help small business owners. Most of the changes are enhancements, changes, or credits.     


How else can we help you incorporate the SECURE Act 2.0 changes into your financial plans? The landscape is filled with rabbit holes down which we did not venture. We worked to include the changes we felt were most critical to our clients, but this is not a full representation of this expansive bill. There were several provisions we didn’t touch on here. Therefore, we hope you’ll consult with us or others (such as your accountant or estate planning attorney) to discuss the details specific to you before you make any changes.  

We look forward to serving as your guide through the ever-evolving world of retirement planning. Please don’t hesitate to reach out with your questions or comments.

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