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What Is the Secure Act 2.0?

When Congress enacted the Setting Every Community Up for Retirement Enhancement (SECURE) Act 2.0,1 the goal was to make saving for retirement more flexible and accessible for Americans. The law took effect in late 2022, but many of its provisions will roll out gradually through 2028.

With many changes taking place in 2024 and 2025, now is a good time to review the impact on retirement savings plans, summarize important provisions already implemented, and look at what to expect in the coming years.


SECURE 2.0 Changes in Effect as of 2024

First, let’s quickly recap how SECURE 2.0 changed retirement savings options in 2023 and 2024.2

  • Required minimum distribution (RMD) changes. The age at which savers must begin taking RMDs changed from 72 to 73 through 2032. Starting in 2033, the RMD age increases to 75.
  • Reduced penalties for missing RMDs. Before SECURE 2.0, individuals who failed to take their RMD would be assessed a 50% penalty on the amount they failed to withdraw that year. SECURE 2.0 reduced the penalty to 25% of the shortfall, or 10% if it is rectified promptly.
  • Creation of Roth SEP and SIMPLE IRAs. Before SECURE 2.0, SIMPLE IRAs and SEP IRAs could only include pre-tax funds. The Act authorized the creation of Roth versions of these accounts.
  • Employer match into a Roth. Before SECURE 2.0, employer matches in an employee’s retirement account were made with pre-tax dollars, meaning they would be taxable when withdrawn in retirement. Now, employers can deposit matching contributions into employee Roth accounts.
  • Rollovers from 529 Plans to Roth IRAs. Starting in 2024, unused funds in a 529 plan can be rolled into a Roth IRA for the same beneficiary.
  • Roth catch-up contributions required for high-income earners. Participants in a 401(k), 403(b), or 457(b) plan who are age 50 or older and had more than $145,000 in wages from the employer sponsoring the plan in the prior calendar year need to be aware of some specific rules for higher-income earners. If you make contributions beyond the standard ($23,000 in 2024), the catch-up portion of your contributions must go into the Roth component of the plan.3
  • Indexed Qualified Charitable Distributions (QCDs) for inflation. When QCDs were introduced in 2006, they were capped at $100,000. That cap has remained in place because it was not indexed for inflation in the original law. SECURE 2.0 linked the QCD limit to inflation, allowing it to change annually.
  • Expanded exceptions to the 10% penalty on early retirement plan withdrawals. SECURE 2.0 expands penalty exemptions to include public safety workers who separate from service before age 50, people impacted by federally declared disasters, terminally ill individuals, victims of domestic abuse and people experiencing personal or family financial emergencies.
  • Matching contributions for student loan payments. Employers may now match employees' student loan payments with contributions to their retirement plans.
  • Extended deadline for contributing to a Solo 401(k). Self-employed people now have up to the due date of their individual tax return to create and fund a Solo 401(k). Previously, these accounts had a year-end deadline.

SECURE 2.0 changes coming in 2025

There aren’t quite as many changes affecting retirement accounts in 2025, but they are notable.

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Starting in 2025, workers aged 60 to 63 can make larger catch-up contributions to their employer-sponsored retirement plans

Higher catch-up contributions for older workers

Starting in 2025, workers aged 60 to 63 can make larger catch-up contributions to their employer-sponsored retirement plans. The new catch-up contribution limit is $11,250 for 401(k), 403(b) and 457 plans, or $5,250 for SIMPLE IRAs.4


Auto-enrollment in workplace plans

Employer-sponsored retirement plans established after December 29, 2022, must automatically enroll newly eligible employees in the plan beginning in 2025. The automatic contribution must be at least 3% (and no more than 10%).5 Employees can opt out of participation.

Existing plans aren’t required to add auto-enrollment features, and several types of employers are exempt from these rules, including small businesses with fewer than 10 employees, new businesses less than three years old, churches and governments.6


Looking ahead: What’s coming in 2026 and beyond

Here are a few SECURE 2.0 retirement changes to look for in the coming years.

  • Qualified long-term care distributions. Starting in 2026, retirement account owners can take annual penalty-free distributions to pay for long-term care insurance. These distributions are capped at $2,500, although that figure will be adjusted annually for inflation.7
  • Tax-free disability pension payments for first responders. Beginning in 2027, law enforcement officers, firefighters, paramedics, and emergency medical technicians who receive service-connected disability and retirement pensions can exclude that pension income from their taxable income.8 Currently, this income is excludable before regular retirement age but taxable once the individual reaches retirement age.

Inherited IRAs: What the SECURE Act and SECURE 2.0 changed

The tax laws surrounding inherited IRAs are complex and have become even more so with the SECURE Act of 2019 and the subsequent SECURE 2.0 Act of 2022.

Prior to the original SECURE Act, non-spouse beneficiaries of inherited IRAs could "stretch" distributions over their lifetimes,9 allowing funds to grow on a tax-deferred basis. That changed under the SECURE Act, which required most beneficiaries to fully deplete the account within 10 years.

But vague language in the law created confusion over whether beneficiaries needed to take annual RMDs within those 10 years or could wait until year 10 and take it all at once.

In 2022, the IRS clarified that if the original owner reached RMD age before their death, then the beneficiary must also take annual distributions during the 10-year window.

Because there was some confusion, the IRS waived penalties for missing RMDs from inherited accounts for 2020 through 2024.10 However, penalties apply to missed RMDs in 2025.


Adapt your strategy for a changing retirement future

SECURE 2.0 is a sweeping law with far-reaching implications on saving for retirement. Whether you’re transitioning unused college funds to retirement savings, planning catch-up contributions in your early 60s, or managing inherited assets, the law introduces new options and new responsibilities.

To make the most of these changes, review your retirement strategy annually and consult a trusted advisor to ensure your investment plan aligns with your financial goals.

Important disclosure information

Asset allocation and diversifications do not ensure against loss. This content is general in nature and does not constitute legal, tax, accounting, financial or investment advice. You are encouraged to consult with competent legal, tax, accounting, financial or investment professionals based on your specific circumstances. We do not make any warranties as to accuracy or completeness of this information, do not endorse any third-party companies, products, or services described here, and take no liability for your use of this information.

  1. United States Senate Committee on Finance, “SECURE 2.0 Act of 2022,” published December 19, 2022. Accessed May 19, 2025. Back
  2. ASPPA, “Key SECURE 2.0 Act Provisions and Effective Dates,” published January 11, 2023. Accessed May 19, 2025. Back
  3. Thomson Reuters, "What are Mandatory 401(k) Roth Contributions Under the SECURE 2.0 Act?" published October 2, 2024. Accessed May 19, 2025. Back
  4. IRS.gov, “401(k) limit increases to $23,500 for 2025, IRA limit remains $7,000,” updated November 12, 2024. Accessed May 19, 2025. Back
  5. IRS.gov, “Treasury, IRS issue proposed regulations on new automatic enrollment requirements for 401(k) and 403(b) plans,” updated January 10, 2025. Accessed May 19, 2025. Back
  6. Paychex, “Secure Act 2.0 Auto-Enrollment Mandate Deadline: What Business Should Know,” updated August 21, 2024. Accessed May 19, 2025. Back
  7. American Association of Long-Term Care Insurance, “The SECURE Act 2.0 & Long-Term Care Insurance,” accessed May 19, 2025. Back
  8. Alistair M. Nevius, JD, “Key tax and retirement provisions in the SECURE 2.0 Act,” Journal of Accountancy, published January 4, 2023. Accessed May 19, 2025. Back
  9. Kelley R. Taylor, “IRS Delays IRA RMD Rules Again,” Kiplinger, updated July 19, 2024. Accessed May 19, 2025. Back
  10. Kate Dore, CFP, EA, “IRS waives mandatory withdrawals from certain inherited individual retirement accounts—again,” MSNBC, published April 19, 2024. Accessed May 19, 2025. Back