The SECURE 2.0 Act, signed into law on December 29, 2022, expands the original 2019 SECURE Act and introduces sweeping changes to bolster retirement savings. It raises the age for required minimum distributions (RMDs) from 72 to 73 in 2023, and eventually to 75 by 2033. It also reduces the penalty for missed RMDs from 50% to 25% (and possibly 10% if timely corrected). A major part of the legislation is automatic enrollment: starting in 2025, all new 401(k) and 403(b) plans must automatically enroll eligible employees at a starting rate of 3%, with annual increases of 1% until reaching at least 10% (and up to 15%), unless the employee opts out. Exemptions apply for very small businesses, start-ups under three years, church, and government plans.
In order to help older workers boost their savings late in their careers, the Act introduces an enhanced “super catch-up” for those aged 60–63 from 2025. These participants can contribute the greater of $10,000 or 150% of the standard catch-up limit. For example, $11,250 in 2025 for 401(k), 403(b), and 457(b) plans. For high earners, the Act requires that catch-up contributions by those earning over $145,000 in the previous year must be made as Roth contributions, beginning in 2026. Other notable provisions include allowing employers to match student loan payments with retirement contributions starting in 2024; permitting rollovers from 529 plans to Roth IRAs up to $35,000 starting in 2024; and transforming the Saver’s Credit into a direct federal match deposited into retirement accounts (starting 2027, up to $2,000 per year). The Act also broadens access for part-time workers, offers a 100% tax credit for small businesses establishing new plans, expands emergency savings, supports longevity annuities (QLACs), and creates a national “lost and found” database for retirement accounts.