How key SECURE 2.0 Act changes may help you save more for retirement

Passed in 2022, the SECURE 2.0 Act included several provisions to help more Americans save for retirement. Many are already in effect, but more are slated to make an impact in 2025 and beyond. Here’s an update.

Retirement savings changes

Catch-up contributions if you’re age 60 to 63

If you’re age 60 to 63, you can already make a catch-up contributions to your retirement accounts, but SECURE 2.0 ups the total by quite a lot: $11,250 to a 401(k) or 403(b), or $5,250 to an IRA in 2025. (Catch-up contributions are $7,500 and $3,500, respectively, for those aged 50 to 59 and older than 63.)

Beginning in 2026, people 50 and older above a minimum income level (currently $145,000 in FICA wages) will be required to make those catch-up contributions as post-tax, or Roth IRA, contributions. But that also means when that money is withdrawn to use in retirement, it’s not taxed.

Workplace retirement plan contributions for part-time workers

Before there was SECURE 2.0, there was an earlier retirement act in 2019 . That legislation offered part-time employees who worked at least 500 hours every year for three consecutive years the chance to make contributions to a 401(k).

SECURE 2.0 reduces the work-time requirement to two years and widens participation to those with 403(b) plans. Your employer should provide you with an eligibility notice once you’ve met the requirement.

Required minimum distributions (RMD)

SECURE 2.0 ups the age when you’re required to take an RMD to 73, then to 75 in 2033, depending on your birth date. And Roth accounts are now completely excluded from the RMD requirement.

The new legislation also reduces the current 50% penalty for failing to take an RMD down to 25%.

Savings, loans, and withdrawals changes

529 account rollovers to Roth IRAs

If you have a 529 in your name but don’t need some of those savings to pay education-related expenses, SECURE 2.0 allows you to roll over up to $35,000 to a Roth IRA. The 529 must be at least 15 years old, and annual Roth IRA contribution limits still apply.

SECURE 2.0 changes to ask your employer about

Emergency expenses

If you have “unforeseeable or immediate financial needs relating to personal or family emergency expenses” you may be able to withdraw up to $1,000 from your retirement account per year without incurring a 10% tax penalty.

Certain requirements must be met before you can take another emergency expense withdrawal. Check with your workplace benefits contact to see if this is an option for you.

Student loan debt payments

Balancing paying off student loans and saving for your future?

Ask your employer if they offer the student loan provision of SECURE 2.0, which allows them to make retirement plan matching contributions on behalf of employees who are paying off qualified student loans.

Auto-enrollment in employer-sponsored retirement plans

If your employer starts a new retirement savings plan, you might be automatically enrolled at a rate between 3% to 10%. Most employers must enroll all employees starting in 2025; there are exceptions to this rule, of course.

Your employer will also automatically increase that enrollment percentage each year until you and other employees reach a 10% contribution rate. (You can choose to opt out, but this is designed to help you save more for retirement and take advantage of compound earnings.)

More SECURE 2.0 Act provisions

It’s a long list—and there’s even more that may affect you, including additional options for minimum rollovers, donations to charities from retirement plans, and a national clearinghouse if you’ve lost track of retirement savings you once had.

For insights, contact your financial professional, or we can help connect you to one in your area.