Understanding the Impact of SECURE Act 2.0 on Your Retirement
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As retirement rules evolve, staying informed is essential. The SECURE Act 2.0, signed into law in late 2022, builds on the original SECURE Act of 2019. This new legislation introduces over 90 changes aimed at enhancing retirement readiness across all age groups.
Whether you’re decades away from retirement or currently enjoying it, these updates could significantly influence how you plan, save, and withdraw funds in retirement.
What Is the SECURE Act 2.0?
The SECURE Act 2.0—short for “Setting Every Community Up for Retirement Enhancement”—is designed to improve retirement security. It encourages greater participation in employer-sponsored plans, increases flexibility for savers, and introduces incentives for long-term financial wellness. The changes begin rolling out in phases, starting in 2023 and continuing through the next few years.
Key Provisions of SECURE Act 2.0 and What They Mean for You
Increased RMD Age
Increased RMD Age
One major update is the change in the age to begin RMDs. Starting in 2023, the age increases from 72 to 73. By 2033, it rises again to 75.
What this means: You now have a longer window to let your retirement savings grow tax-deferred. This extra time can be especially helpful if you have other income sources and don’t need to tap your retirement accounts right away.
Higher Catch-Up Contributions
Beginning in 2025, individuals aged 60 to 63 can contribute more to their employer-sponsored retirement plans. The new cap will rise to $10,000, adjusted for inflation.
What this means: This gives pre-retirees a valuable opportunity to build their nest egg during their peak earning years
Mandatory Roth Treatment for Some Catch-Up Contributions
Also in 2025, those earning more than $145,000 per year must make catch-up contributions to Roth accounts. Unlike traditional contributions, Roth contributions are taxed upfront.
What this means: While you’ll pay taxes now, withdrawals in retirement will be tax-free. This can be beneficial if you expect to be in a higher tax bracket later.
Emergency Savings Linked to Retirement Plans
Employers may now offer emergency savings accounts linked to retirement plans. Non-highly compensated employees can contribute up to $2,500 in a Roth-style emergency account.
What this means: These accounts give savers a safety net, allowing penalty-free access to funds for short-term needs without jeopardizing long-term savings.
Student Loan Matching
From 2025, new 401(k) and 403(b) plans must automatically enroll employees. Initial contribution rates start at 3%, increasing annually to at least 10%.
What this means: This change boosts retirement participation, especially among younger workers who may not otherwise prioritize saving.
529 Plan Rollovers into Roth IRAs
Starting in 2024, families can roll over unused 529 education savings into a Roth IRA, with a $35,000 lifetime cap. The 529 account must be at least 15 years old to qualify.
What this means: If your child doesn’t use all their education funds, you can now convert that money into retirement savings—creating greater long-term financial flexibility.
What You Should Do Next
Whether you’re a young professional balancing student debt or a retiree fine-tuning your retirement income withdrawal strategy, the SECURE Act 2.0 presents new opportunities to strengthen your retirement plan, including those related to Social Security benefits for retirement benefits and understanding your full retirement age. Here are a few steps to consider:
- Evaluate new employer-sponsored retirement plan benefits for exploring types of retirement plans and more investing opportunities.
- Consider Roth conversions, especially if you’re a high-income earner.
- Maximize catch-up contributions if you’re 60 or older.
- Evaluate new employer-sponsored retirement plan benefits for more investing opportunities.
- Plan for healthcare and emergency needs using linked savings features.
At Goldstone Financial Group, we specialize in helping clients build retirement strategies that adapt to life’s changes—including major legislation like the SECURE Act 2.0. Our team of experienced registered investment advisor professionals is here to tailor a plan to your goals, offering personalized guidance on taxes, investment management, estate planning, and more.
Ready to Retire—and Stay Retired?
Goldstone Financial Group specializes in helping clients build retirement strategies that adapt to life’s changes—including major legislation like the SECURE Act 2.0. Our team of experienced professionals is here to tailor a plan to your goals, offering personalized guidance on taxes, investment management, estate planning, and more.
Schedule your free consultation today and take the first step toward a retirement that works for you—now and in the future.