8+ Ways to Boost Your Retirement Savings with SECURE Act 2.0

Jan 4, 2023

Signed into law just over three years ago, the original SECURE Act ushered in significant changes for Americans looking to boost their retirement savings. As those changes took effect, many policymakers were already busy creating their SECURE Act ‘2.0’ wish lists – and fast forward to 2023, just in time for the new year, many of those wishes were granted with the passing of the $1.7 trillion omnibus spending bill.

Here are key highlights:

Required Minimum Distribution (RMD) age set to increase again. The increases will follow this schedule:

  • Those born before 1951 will see no change in when to take RMDs.
  • If born between 1951 and 1959, RMDs will begin at age 73 (i.e., 2024 and later).
  • Those born in 1960 and after will begin RMDs at age 75 (i.e., 2035 and later).

For those who can afford to delay RMDs, proactive tax planning and income smoothing will play a key role in minimizing lifetime taxes.

Increased catch-up contributions... with a catch. Beginning in 2025, catch-up contribution limits for individuals between the ages of 60 and 63 will increase to:

  • $10,000 for 401(k)s (currently $6,500)
  • $5,000 for SIMPLE IRAs (currently $3,500)

Both of these limits, including the $1,000 IRA catch-up limit, will now be indexed for inflation. The catch is that, beginning in 2024, those making over $145,000 per year can only make Roth catch-up contributions to their employer plan (excluding IRA catch-up).

A few new twists for Roth accounts. These accounts have really been having their day in the sun the last few years and the following changes will make them even more appealing:

  • Employers can now make matching Roth contributions to an employee’s retirement plan (taxable to the employee).
  • RMD requirements for Roth 401(k)s and 403(b)s are eliminated to align with Roth IRAs.
  • SEP and SIMPLE IRAs can now add a Roth option.
  • Beginning in 2024, there will be the new ability to transfer a beneficiary’s 529 Plan assets to their Roth IRA. Annual transfers will be limited to contribution limits, aggregate lifetime transfers limited to $35,000, the 529 account must have been maintained for 15+ years with the same beneficiary, however, there is no income limit to worry about like regular Roth IRA contributions.

The popularity of 529 Plans have been on the rise recently, especially with the new FAFSA rules around non-parent owned 529 Plans and their usefulness in estate planning, making now a perfect time to give them a second look for yourself and others.

Qualified Charitable Distributions (QCDs) get a facelift. There are two significant changes for QCDs:

  • Beginning in 2024, the annual QCD limit will increase by cost-of-living adjustments (COLAs).
  • The new ability to make a one-time QCD of up to $50,000 to a CRAT, CRUT, or Charitable Gift Annuity.

Note: QCDs can be made after age 70 ½ and count towards annual RMDs. However, QCDs cannot be made to Donor Advised Funds or certain charities.

More opportunities for employees to save for retirement. Like the original SECURE Act, this bill’s primary goal is to expand access to retirement accounts for all Americans no matter their situation.

  • Starting in 2024, employees making qualified student loan payments can now receive a matching contribution to their retirement plan from their employer.
  • Beginning in 2025, new 401(k) and 403(b) plans will be required to automatically enroll new employees at a contribution rate of at least 3%, but not more than 10%, and automatically increase 1% each year until 10%, unless the employee opts out.
  • Creates a new class of 401(k) and 403(b) plans called ’Starter‘ plans.
  • Converts the Saver’s Credit (credit for retirement savings contribution) to a new Saver’s Match that com be contributed directly to a retirement plan.
  • Part-time workers logging more than 500 hours a year will be eligible for their company’s 401(k) plan after two years (currently three).

Significantly expands emergency access to retirement savings.

  • Beginning in 2024, employees can take an ‘emergency withdrawal’ of up to $1,000 from their retirement account, limited to once every three years unless the loan has been fully repaid.
  • Also in 2024, retirement plans can add an ’Emergency Savings Accounts’ option. The maximum balance will be limited to $2,500, must be held in cash and classified as Roth or after-tax meaning distributions will be tax- and penalty-free.
  • Penalty-free withdrawals from retirement plans for individuals facing domestic abuse (lesser of $10,000 or 50% of present value of benefits).
  • Penalty-free withdrawals for individuals with a terminal illness (i.e., death expected to occur within seven years, increased from two).

Creates new incentives for businesses.

  • Increases the tax credit for small employer pension plan startup costs (from 50% to 100% for employers with less than 100 employees, an increase from 50 employees).
  • 403(b) plans would be allowed to participate in multiple employer plans (treated as one aggregate plan).
  • Creates a new tax credit for small businesses who allow military spouses immediate access and vesting in their retirement plan.

And for good measure, a few other changes we felt important to note.

  • Beginning in 2023, the 50% penalty for a missed RMD will be lowered to 25%, and just 10% if fixed within a timely matter.
  • Effective January 1, 2024, surviving spouses can take RMDs from a deceased spouse’s retirement account as if they were the deceased spouse. In other words, they can delay RMDs until the deceased spouse would have started them and use the more generous Uniform Lifetime Table.

As the rules continue to change and evolve around saving for retirement, we are here to help you make sense of it all.

Subscribe to our insights to stay up to date with the latest financial planning and investment tips and news.

We're here to help

We're always available if you'd like to schedule a call with a member of our team to talk about the current environment, solutions we offer, or other questions top of mind for you.

Schedule a call

Want regular insights into financial planning and investing-related topics?



Sign up to receive the latest financial planning and investment tips and news.

View all Preferences