Yes. The SECURE Act 2.0 was passed and signed into law on December 29, 2022, as Division T of the Consolidated Appropriations Act, 2023 (Public Law 117-328). It contains roughly 90 retirement-related provisions, and they do not all take effect at once. Some started the day the bill was signed, others activated in 2023 or 2024, and several more come online in 2026 and 2027. What follows is what the law actually changes for you, grouped by the decision it affects.
When You Must Start Taking Money Out
Federal law requires owners of tax-deferred retirement accounts to begin withdrawing a minimum amount each year at a set age. SECURE 2.0 pushed that starting age from 72 to 73 as of January 1, 2023.1Internal Revenue Service. Retirement Plan and IRA Required Minimum Distributions FAQs If you were born between 1951 and 1959, age 73 is your trigger. If you were born in 1960 or later, your starting age is 75, effective January 1, 2033.
The penalty for missing a required distribution also dropped. It used to be 50% of the amount you failed to withdraw. It is now 25%, and if you correct the shortfall within two years, the penalty falls to 10%.1Internal Revenue Service. Retirement Plan and IRA Required Minimum Distributions FAQs The correction window is worth knowing about. On a large account balance, the gap between 25% and 10% is significant, and the fix itself is straightforward.
How Much You Can Contribute
Workers 50 and older can make extra catch-up contributions on top of the standard annual deferral limit. For 2026, the standard 401(k)-style deferral limit is $24,500, and the regular age-50 catch-up is $8,000, allowing a total deferral of $32,500.2Internal Revenue Service. 401(k) Limit Increases to $24,500 for 2026, IRA Limit Increases to $7,500
SECURE 2.0 added a higher catch-up tier for workers aged 60 through 63. For 2026, those workers can contribute up to $11,250 in catch-up money, bringing their total possible deferral to $35,750.2Internal Revenue Service. 401(k) Limit Increases to $24,500 for 2026, IRA Limit Increases to $7,500 The provision targets people in their final working years who may have fallen behind earlier in their careers.
The IRA catch-up limit for people 50 and older used to be locked at $1,000. SECURE 2.0 tied it to inflation, and the first adjustment brought it to $1,100 for 2026.3Internal Revenue Service. Notice 2025-67, 2026 Amounts Relating to Retirement Plans and IRAs
Roth-Only Catch-Ups for High Earners in 2027
Beginning with the 2027 tax year, workers who earned more than a set wage threshold in the prior year must make all catch-up contributions on a Roth (after-tax) basis. No pre-tax option will be available for them.4Internal Revenue Service. Treasury, IRS Issue Final Regulations on New Roth Catch-Up Rule, Other SECURE 2.0 Act Provisions The original statutory threshold was $145,000 in wages; it adjusts for inflation and has already risen to $150,000. Plans may adopt the requirement earlier using a reasonable, good-faith interpretation of the statute. If you are over 50 and above the threshold, your catch-up dollars will go in after taxes but grow and come out tax-free in retirement.
Getting to Your Money Early Without the 10% Penalty
Withdrawals before age 59½ generally trigger a 10% early withdrawal penalty on top of ordinary income tax.5Internal Revenue Service. Retirement Topics – Exceptions to Tax on Early Distributions SECURE 2.0 added several new exceptions.
Emergency personal expenses. You can withdraw up to $1,000 once per calendar year for an unforeseeable personal or family emergency without the 10% penalty. The actual limit is the lesser of $1,000 or your vested balance minus $1,000, so someone with a $1,200 balance could only take $200. Income tax still applies. You have three years to repay the amount, and until you repay it (or make new contributions equal to it), you cannot take another emergency distribution.
Domestic abuse. Victims of domestic abuse by a spouse or domestic partner can withdraw up to the lesser of $10,000 or 50% of their vested account balance without the 10% penalty. The exception applies to distributions made after December 31, 2023, and the amount can be repaid within three years.5Internal Revenue Service. Retirement Topics – Exceptions to Tax on Early Distributions
Terminal illness. If a physician certifies that you have a terminal illness, you can take distributions without the 10% penalty. Certification must be in place as of the date of the distribution. There is no dollar cap, and the amount can be repaid within three years if your condition improves.5Internal Revenue Service. Retirement Topics – Exceptions to Tax on Early Distributions
Pension-linked emergency savings. Employers can offer a short-term emergency savings account linked to their retirement plan. Non-highly-compensated employees can contribute up to $2,500 on a Roth basis, and withdrawals are tax-free and penalty-free.6U.S. Department of Labor. FAQs: Pension-Linked Emergency Savings Accounts Once the account hits the cap, further contributions flow into the employee’s primary retirement account.
Student Loan Payments That Earn a Retirement Match
For plan years beginning after December 31, 2023, employers can treat an employee’s qualified student loan payments as if they were retirement plan contributions for purposes of the employer match.7Internal Revenue Service. Notice 2024-63, Guidance Under Section 110 of the SECURE 2.0 Act If your employer offers this, making your monthly loan payment earns you the same matching contribution you would get by deferring into a 401(k), 403(b), SIMPLE IRA, or governmental 457(b). The match rate for loan payments must equal the match rate for regular deferrals, and the same vesting schedule applies. Employees self-certify their payments. Not every employer has adopted this feature, so check with your plan administrator if you are carrying student debt.
Moving Leftover 529 Money Into a Roth IRA
Beneficiaries of 529 education savings plans can now roll unused funds into a Roth IRA, subject to conditions. The lifetime cap is $35,000 per beneficiary, and each year’s rollover counts against the annual Roth IRA contribution limit, which is $7,500 for 2026.2Internal Revenue Service. 401(k) Limit Increases to $24,500 for 2026, IRA Limit Increases to $7,500 The 529 must have been open for at least 15 years, and contributions made in the last five years are ineligible. Moving the full $35,000 takes at least five years of rollovers at current limits. Before this change, pulling 529 money out for non-education uses meant income tax and a 10% penalty on the earnings.
Automatic Enrollment in New Plans
Any 401(k) or 403(b) plan established after December 29, 2022, must automatically enroll eligible employees. The default contribution rate must be between 3% and 10% of pay and must increase by 1% each year until it reaches at least 10%, but no more than 15%. You can always opt out or adjust your rate. Plans that existed before the law was signed are grandfathered. Several categories are exempt from the mandate:
- Employers with 10 or fewer employees
- Businesses operating for less than three years
- Church and governmental plans
- SIMPLE IRA plans
The Saver’s Match Starting in 2027
The current Saver’s Credit (formally the Retirement Savings Contributions Credit) will be replaced in 2027 by the Saver’s Match. Instead of a non-refundable credit against your tax bill, the federal government will deposit a matching contribution directly into your retirement account.8Office of the Law Revision Counsel. 26 U.S. Code 6433 – Saver’s Match The match equals 50% of your qualified retirement contributions up to $2,000, for a maximum deposit of $1,000 per person. Eligibility phases out at higher income levels. This shift matters most for lower-income workers who owed little or no federal tax and could not use the old credit; the new match lands in the account regardless of tax liability.
If You Run a Small Business
Small employers that set up a new retirement plan can claim substantial tax credits. For businesses with 1 to 50 employees, the credit covers 100% of qualified startup costs, up to $5,000 per year for the first three years.9Internal Revenue Service. Instructions for Form 8881 Businesses with 51 to 100 employees receive a 50% credit on the same costs. Employers with up to 50 employees can also receive an additional credit for employer contributions during the plan’s first five years, worth up to $1,000 per employee earning $100,000 or less per year. That contribution credit phases out for employers with 51 to 100 employees. Together, the two credits can cover most of the setup and early contribution cost of a first plan.