How Can the Secure Act 2.0 Benefit You?

As of January 1, 2023, the required minimum distribution (RMD) age was raised to 73. Previously, it was 72. The RMD age will be pushed to 75 starting in 2033.

In 2024, RMDs were eliminated for Roth accounts in workplace plans.

Beginning in 2025, employers will be able to let employees from ages 60 through 63 make catch-up contributions of up to $10,000 a year. Then, starting in 2026, the $10,000 limit will be subject to an annual increase based on inflation.

For IRAs, catch-up contributions are currently capped at $1,000 a year for people aged 50 or older. Under Secure 2.0, that limit was indexed to inflation starting in 2024, meaning the cap could go up in any year from 2024 on based on the cost of living.

Starting in 2024, employers may help workers that are repaying qualified student loans simultaneously save for retirement by investing matching contributions in their employer’s retirement account. Ultimately, this will help employees who may not be able to save for retirement because they are overwhelmed with student debt.

Starting in 2024, an employee can withdraw up to $1,000 a year from their workplace plan to cover expenses related to a personal or family emergency, subject to income tax but not the 10 percent penalty that would otherwise generally apply to a distribution before age 59½. Employees will have the option to repay the distribution into a plan account within three years.

Starting in 2024, 529 plan owners will generally be able to move unused 529 savings to a Roth IRA for the beneficiary without triggering taxes or a penalty on the transfer. There will be a $35,000 lifetime limit per account beneficiary on the amount transferred and there are a number of requirements to qualify for the rollover so it is important to review each client’s situation.