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SECURE Act 2.0: An Overview

SECURE Act 2.0: An Overview

| March 15, 2024

As we continue into 2024, we wanted to revisit the changes the SECURE 2.0 Act continues to bring to our retirement planning. Talk to a Financial Consultant if you think you could benefit from one of the changes listed below. 

An Overview

In the final days of 2022, Congress passed a new set of retirement rules designed to facilitate contribution to retirement plans and access to those funds earmarked for retirement.

The law is called SECURE 2.0, and it is a follow-up to the Setting Every Community Up for Retirement Enhancement (SECURE) Act passed in 2019.

The sweeping legislation has dozens of significant provisions; here are the major provisions of the law.

New Distribution Rules

Required minimum distribution (RMD) age rose to 73 years in 2023. By far, one of the most critical changes was increasing the age at which owners of retirement accounts must begin taking RMDs. Further, starting in 2033, RMDs may begin at age 75. If you have already turned 72, you must continue taking distributions. 

Access to funds. Plan participants can use retirement funds in an emergency without penalty or fees. For example, starting in 2024, an employee can take 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.1

Reduced penalty. If you miss an RMD for some reason, the penalty tax has dropped to 25 percent from 50 percent. If you promptly fix the mistake, the penalty may drop to 10 percent.2

New Accumulation Rules

Catch-up contributions. From January 1, 2025, investors aged 60 through 63 years can make annual catch-up contributions of up to $10,000 to workplace retirement plans. The catch-up amount for people aged 50 and older changed in 2023 to $7,500. However, the law applies certain stipulations to individuals with annual earnings more than $145,000.3

Automatic enrollment. In 2025, the Act requires employers to automatically enroll employees into workplace plans. However, employees can choose to opt-out.4

Student loan matching. Starting this year, 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.5

Revised Roth Rules

529 to a Roth. Starting in 2024, pending certain conditions, individuals can roll a 529 education savings plan into a Roth individual retirement account (IRA). Therefore, if your child receives a scholarship, goes to a less expensive school, or does not go to school, the money can get repositioned into a retirement account. Keep in mind that rollovers are subject to the annual Roth IRA contribution limit. 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 also allowed under certain other circumstances, such as the owner’s death. The original Roth IRA owner is not required to take minimum annual withdrawals.6

SIMPLE and SEP. Employers can now make Roth contributions to savings incentive match plans for employees (SIMPLE) or simplified employee pension (SEP).7

Roth 401(k)s and Roth 403(b)s. The legislation aligns the rules for Roth 401(k)s and Roth 403(b)s with Roth IRA rules. Beginning this year, the legislation no longer requires minimum distributions from Roth accounts in employer retirement plans.8

More Highlights

Support for small businesses. In 2023, the law increased the credit to help with the administrative costs of setting up a retirement plan. The credit increased to 100 percent from 50 percent for businesses with less than 50 employees. By boosting the credit, lawmakers aimed to remove one of the most significant barriers for small businesses offering a workplace plan.9

Qualified charitable donations (QCDs). QCDs now adjust for inflation. The limit applies on an individual basis; therefore, for a married couple, each person who is 70½ years and older can make a QCD as long as it remains under the limit.10

The change in retirement rules does not mean adjusting your current strategy is appropriate. Each of your retirement assets plays a specific role in your overall financial strategy, so a change to one may require changes to another.

Moreover, retirement rules can change without notice, and there is no guarantee that the treatment of specific rules will remain the same. This article intends to give you a broad overview of SECURE 2.0. It is not intended as a substitute for real-life advice. If changes are appropriate, your trusted financial professional can outline an approach and work with your tax and legal professionals, if applicable.


1. CNBC.com, December 22, 2022
2. Fidelity.com, December 22, 2022
3. Fidelity.com, December 22, 2022
4. Paychex.com, December 30, 2022
5. PlanSponsor.com, December 27, 2022
6. CNBC.com, December 23, 2022
7. Forbes.com, January 5, 2023
8. Forbes.com, January 5, 2023
9. Paychex.com, December 30, 2022
10. FidelityCharitable.org, December 29, 2022

The content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. This material was developed and produced by FMG Suite to provide information on a topic that may be of interest. FMG, LLC, is not affiliated with the named broker-dealer, state- or SEC-registered investment advisory firm. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security. Copyright 2024 FMG Suite.