What is the Secure 2.0 Act and what does it mean for you?

The SECURE 2.0 Act is a federal law designed to help people save more for retirement and make retirement plans more accessible and flexible. It builds on the original SECURE Act passed in 2019 and introduces a series of changes that take effect gradually between 2023 and 2027.

Some changes apply automatically, while others depend on whether your employer adopts them.

Required minimum distributions (RMDs)

If you have retirement savings and are approaching retirement age:

The age at which required minimum distributions must begin increased from 72 to 73 starting in 2023.
The RMD age will increase again to 75 by 2033.
The penalty for missing an RMD was reduced from 50% to 25%, and may be reduced further to 10% if corrected promptly.

Automatic enrollment in new plans

To encourage saving earlier:

Beginning in 2025, most new 401(k) and 403(b) plans must automatically enroll eligible employees.
Contributions will generally start at 3% of pay and increase by 1% each year until reaching at least 10% (and up to 15%), unless you choose a different rate or opt out.
Certain employers are exempt, including very small businesses, new businesses under three years old, church plans, and government plans.

If you are already participating in a plan, this change may not affect you.

Higher catch-up contributions for ages 60–63

To help older workers boost retirement savings:

Starting in 2025, participants ages 60–63 may be eligible for an enhanced “super catch-up” contribution.
The limit is the greater of $10,000 or 150% of the regular catch-up limit, indexed for inflation.
For example, this equals $11,250 in 2025 for many plans.

Roth requirement for certain catch-up contributions

Beginning in 2026:

Participants who earned more than $150,000 in FICA wages in the prior year must make catch-up contributions as Roth (after-tax)
This requirement applies only to catch-up contributions, not regular employee contributions.

Student loan matching

If you are paying off student loans:

Starting in 2024, employers may choose to make retirement plan contributions based on your qualified student loan payments, even if you are not contributing to the plan yourself.
These employer contributions are deposited into your retirement account.
Availability depends on whether your employer adopts this feature.

529 plan rollovers to Roth IRAs

For families saving for education:

Starting in 2024, unused 529 plan funds may be rolled into a Roth IRA for the beneficiary, up to a lifetime limit of $35,000, if certain requirements are met.

Saver’s Credit becomes a federal match

To encourage retirement savings for lower- and moderate-income workers:

Beginning in 2027, the Saver’s Credit will be replaced with a federal matching contribution deposited directly into your retirement account.
The match may be up to $2,000 per year, depending on income and contributions.

Additional participant-focused changes

SECURE 2.0 also:

Expands access to retirement plans for long-term part-time employees
Allows plans to offer emergency savings options and limited emergency withdrawals
Expands flexibility for longevity annuities (QLACs)
Creates a national retirement plan “lost and found” database to help locate old accounts

What participants should know

Not all SECURE 2.0 features are available in every plan—many require employer adoption.
Changes are being rolled out over several years.
You may want to periodically review your contribution elections and plan features to see how these changes fit your personal situation.

For questions about which SECURE 2.0 features are available in your plan, review your plan materials or contact your plan administrator.