SECURE Act 2.0 Provisions: RMDs, Catch-Ups, and 529 Rollovers

The SECURE Act 2.0 provisions, enacted on December 29, 2022 as part of the Consolidated Appropriations Act of 2023, rewrote large sections of the rules governing 401(k)s, IRAs, and other tax-advantaged retirement accounts.¹ The law pushes back the age at which withdrawals become mandatory, forces new workplace plans to enroll workers automatically, raises catch-up limits for people nearing retirement, opens new penalty-free withdrawal paths, and creates a federal matching deposit for lower-income savers. Some pieces took effect right away. Others phase in through 2027, and several dollar figures adjust for inflation each year.

When You Have to Start Taking Money Out

The required minimum distribution age moved up in two steps. If you were born between 1951 and 1959, your RMD age is 73. If you were born in 1960 or later, it’s 75, effective January 1, 2033.² Money in a traditional 401(k) or IRA can keep compounding tax-deferred for up to three additional years before withdrawals are required.

Roth 401(k)s No Longer Force Withdrawals

Designated Roth accounts inside employer plans used to require distributions during the owner’s lifetime, unlike Roth IRAs. That inconsistency is gone. Roth balances in 401(k)s and 403(b)s no longer trigger lifetime RMDs.³ Beneficiaries who inherit the account are still subject to post-death distribution rules.

A Smaller Penalty If You Miss a Distribution

The excise tax for failing to take a full RMD fell from 50% to 25% of the shortfall. Correct the mistake within two years and the penalty drops to 10%.³ You still file Form 5329 for the year the distribution was missed.

Higher Catch-Up Contributions in Your Early 60s

Workers 50 and older have long been able to contribute extra above the normal deferral cap. For 2026, the regular 401(k) limit is $24,500 and the standard catch-up is $8,000.⁴

SECURE 2.0 added a “super” catch-up for people who turn 60, 61, 62, or 63 during the year. The enhanced amount is the greater of $10,000 (inflation-adjusted) or 150% of the standard catch-up. That works out to $11,250 in 2026 for 401(k), 403(b), and governmental 457 plans.⁴ A 62-year-old in 2026 could put away $35,750 total. At 64, you drop back to the standard $8,000 catch-up. In SIMPLE IRA plans, the super catch-up is $5,250 for 2026 versus $4,000 for other catch-up-eligible participants.

IRA contribution limits are separate and smaller. The 2026 base limit is $7,500 with a $1,100 catch-up for those 50 and older.⁵ The IRA catch-up now moves with inflation, which it didn’t before.

High Earners Must Use Roth for Catch-Ups

Starting in 2026, if your FICA-taxable wages from your plan sponsor exceeded $150,000 in the prior year, all catch-up contributions to that employer’s plan must go into a designated Roth account.⁶ The contributions are made with after-tax dollars, grow tax-free, and come out tax-free in retirement. The $150,000 threshold is indexed for inflation.⁷ The rule was originally set for 2024 but delayed to give employers time to update payroll. Earn under the threshold and pre-tax catch-ups still work as before.

Automatic Enrollment in New Workplace Plans

Any 401(k) or 403(b) plan established after December 29, 2022 has to enroll eligible employees automatically. You can opt out, but participation is the default. The starting contribution rate must be at least 3% and no more than 10% of pay, and it steps up by 1 percentage point each year until it reaches at least 10% and no more than 15%.⁸

Plans that already existed when the law was signed are grandfathered. So are several categories of employer:

Businesses with 10 or fewer employees.
Companies that have been operating less than three years.
Church and governmental plans.

Part-Time Workers Qualify Sooner

Starting January 1, 2025, part-time employees who work at least 500 hours a year for two consecutive years and are at least 21 years old must be allowed into the plan. The original SECURE Act of 2019 required three consecutive years; SECURE 2.0 cut that to two. The rule applies to 401(k) plans and ERISA-covered 403(b) plans.⁹

Employer Matches Based on Student Loan Payments

Employers can now make matching retirement contributions based on your student loan payments even when you aren’t contributing from your paycheck. Put $500 toward student debt in a given month, and your employer can treat that as if it were an elective deferral and deposit a match on the same terms it uses for regular deferrals.¹⁰

The match rate and vesting schedule mirror the plan’s normal terms. It’s available in 401(k), 403(b), SIMPLE IRA, and governmental 457(b) plans. Employers can accept your written certification that you made the payments rather than demanding receipts.¹⁰ The debt must be a “qualified education loan” covering cost of attendance at an eligible institution, undergraduate or graduate.¹¹ The provision is optional for employers, so check whether yours has adopted it.

New Ways to Take Money Out Without a Penalty

Several new provisions carve out early-access options that don’t trigger the usual 10% penalty.

Emergency Personal Expense Withdrawals

You can take one penalty-free withdrawal per calendar year, up to $1,000, for unforeseeable or immediate personal or family financial needs. The cap is actually the lesser of $1,000 or the amount by which your vested balance exceeds $1,000, so the withdrawal can’t drain the account below that floor. You have three years to repay. If you don’t, you can’t take another emergency distribution until that window closes. A written self-certification is enough.¹²

Emergency Savings Sidecars

Employers can set up a Pension-Linked Emergency Savings Account inside the retirement plan. These are Roth-style with a $2,500 balance cap that’s indexed for inflation.¹³ Employers can auto-enroll workers at up to 3% of pay, and once the balance hits the cap, further contributions flow into the regular Roth account. Participants can withdraw from a PLESA at least once a month, no penalties, no documentation.

Domestic Abuse and Terminal Illness

A participant who has experienced abuse by a spouse or domestic partner can withdraw the lesser of $10,000 (inflation-adjusted) or 50% of the vested balance without the 10% penalty. The request has to come within a year of the abuse, and self-certification is allowed. Withdrawals can be repaid within three years, with taxes refunded on any amount paid back.¹⁴

If a physician certifies a condition reasonably expected to result in death within 84 months, penalty-free distributions are available with no dollar limit, and can be repaid within three years.¹⁴

The Saver’s Match Replaces the Saver’s Credit in 2027

For tax years after December 31, 2026, the existing Saver’s Credit becomes the Saver’s Match: a direct federal deposit into your retirement account rather than a credit on your return. The match rate is 50% of eligible contributions.¹⁵

Statutory base income limits (to be adjusted for inflation before launch):

Joint filers: full match up to $41,000 AGI, phasing out at $71,000.
Head of household: full match up to $30,750 AGI, phasing out at $53,250.
Single filers: full match up to $20,500 AGI, phasing out at $35,500.

The match deposits into a traditional (pre-tax) account, even if your own contribution went to a Roth. If your plan or IRA custodian won’t accept the deposit, you’ll need to open a traditional IRA that will. The shift matters because a tax credit only helps if you owe tax, while a direct deposit reaches lower-income savers who often have no liability to offset.¹⁵

Unused 529 Money Can Move to a Roth IRA

Families with leftover college savings can now roll 529 funds into a Roth IRA for the same beneficiary. The transfer has several conditions:

The 529 must have been open for at least 15 years.
Annual rollovers are capped at the Roth IRA contribution limit for the year ($7,500 for 2026).⁵
The lifetime cap is $35,000 per beneficiary.
Contributions made to the 529 in the five years before the rollover, and earnings on those contributions, can’t be transferred.
The Roth IRA must belong to the person who was the 529 beneficiary.

The normal Roth IRA income limits don’t apply to these rollovers, so a high-earning beneficiary can still receive one. State tax treatment varies. The rollover is tax-free federally, but some states treat it as a non-qualified distribution and may recapture any state deduction claimed for the original contribution. Check your state’s rules before moving money.

Small Business Credits for Starting a Plan

If you’re the employer rather than the employee, the law substantially expanded the credits available for setting up a plan. Businesses with 50 or fewer employees who earned at least $5,000 in the prior year can claim a credit covering 100% of eligible startup costs, capped at the greater of $500 or $250 per non-highly compensated employee, up to $5,000 a year, for each of the first three plan years.¹⁶ Employers with 51 to 100 employees get 50% of eligible costs on the same structure.

A separate credit reimburses actual employer contributions. For businesses with 1 to 50 employees, the credit is 100% of contributions in years one and two, 75% in year three, 50% in year four, and 25% in year five, capped at $1,000 per employee. Larger employers (51 to 100 employees) follow the same schedule with the percentage reduced by 2 points for each employee above 50.¹⁶

Adding an auto-enrollment feature earns an additional $500 per year for three years. Hiring a military spouse and enrolling them in the plan within two months earns a credit of $200 plus 100% of employer contributions up to $300, for a maximum of $500 per spouse, for three years; the spouse must be treated as having two years of service for eligibility and be 100% vested immediately.¹⁶

1
GovInfo. Public Law 117-328 – Consolidated Appropriations Act, 2023
2
United States Senate Committee on Health, Education, Labor, and Pensions. SECURE 2.0 Section by Section
3
Internal Revenue Service. Retirement Plan and IRA Required Minimum Distributions FAQs
4
Internal Revenue Service. 401(k) Limit Increases to $24,500 for 2026, IRA Limit Increases to $7,500
5
Internal Revenue Service. Retirement Topics – IRA Contribution Limits
6
Internal Revenue Service. Notice 2025-67 – 2026 Amounts Relating to Retirement Plans and IRAs
7
Internal Revenue Service. Treasury, IRS Issue Final Regulations on New Roth Catch-Up Rule, Other SECURE 2.0 Act Provisions
8
United States Senate Committee on Finance. SECURE 2.0 Act of 2022 Section-by-Section Summary
9
Internal Revenue Service. Notice 2024-73 – Additional Guidance With Respect to Long-Term, Part-Time Employees
10
Internal Revenue Service. Notice 2024-63 – Guidance Under Section 110 of the SECURE 2.0 Act With Respect to Matching Contributions Made on Account of Qualified Student Loan Payments
11
U.S. Congress. Text – H.R.2954 – 117th Congress – Securing a Strong Retirement Act of 2022
12
Internal Revenue Service. Notice 2024-55 – Certain Exceptions to the 10 Percent Additional Tax Under Code Section 72(t)
13
U.S. Department of Labor. FAQs – Pension-Linked Emergency Savings Accounts
14
Internal Revenue Service. Retirement Topics – Exceptions to Tax on Early Distributions
15
Office of the Law Revision Counsel. 26 U.S. Code 6433 – Saver’s Match
16
Internal Revenue Service. Retirement Plans Startup Costs Tax Credit