What Is the SECURE Act and How It Affects Retirement?

The SECURE Act is a 2019 federal law that rewrote key rules for retirement accounts, and a follow-up law called SECURE 2.0, passed in 2022, extended and adjusted those changes. Together they raised the age at which you have to start withdrawing money from traditional retirement accounts, put a 10-year deadline on most inherited IRAs, removed the age limit for contributing to a traditional IRA, expanded 401(k) access for part-time workers, and softened several penalties. Because SECURE 2.0 directly modifies the original SECURE Act rules, the two laws work as a single package, and the figures below reflect what actually applies in 2026.

When You Have to Start Taking Money Out

Before the SECURE Act, you had to begin required minimum distributions from a traditional IRA or 401(k) by April 1 of the year after you turned 70½. The SECURE Act moved that starting age to 72. SECURE 2.0 pushed it further: to 73 beginning in 2023, and to 75 starting in 2033.¹

In 2026, the trigger age is 73. If you turned 73 in 2025, your first required distribution was due by April 1, 2026, and your second is due by December 31, 2026. Taking both in the same calendar year can push you into a higher bracket, so most advisors suggest taking the first distribution in the year you actually turn 73 rather than waiting for the April deadline.²

There’s a separate rule for employer plans. If you’re still working for the company that sponsors your 401(k) or 403(b), and you don’t own more than 5% of the business, you can delay distributions from that specific plan until you actually retire.¹ The exception doesn’t cover IRAs or accounts from prior employers.

The Penalty for Missing a Distribution

Missing a required distribution used to trigger a 50% excise tax on the amount you should have withdrawn. SECURE 2.0 cut that penalty to 25%, and if you correct the shortfall within two years, it drops to 10%.²

The two-year self-correction window is genuinely useful. Withdraw the missed amount, file an amended return within that window, and you save 15 percentage points on the penalty. Before SECURE 2.0, no reduced rate for self-correction existed.

What Changed for Inherited Retirement Accounts

This is the change that has caught the most people off guard. Before 2020, a non-spouse beneficiary who inherited an IRA could spread withdrawals across their own life expectancy, sometimes for decades. That approach, called the stretch IRA, was a powerful wealth-transfer tool. The SECURE Act eliminated it for most beneficiaries.

If you inherit a retirement account from someone who died in 2020 or later, and you aren’t an eligible designated beneficiary, you must empty the entire account by the end of the tenth year after the owner’s death.³ The 10-year clock applies whether you’re an adult child, a sibling, a friend, or a trust that doesn’t qualify for an exception.

Who Still Qualifies for the Stretch

Five categories of beneficiaries can still use the older life-expectancy method:⁴

Surviving spouses, who can also treat the inherited IRA as their own or roll it into an existing account.
Minor children of the account owner. The stretch applies until the child reaches 21, and then the 10-year clock starts.
Disabled individuals, as defined by IRS standards.
Chronically ill individuals, as defined by IRS standards.
Beneficiaries who are not more than 10 years younger than the deceased owner.

When an eligible designated beneficiary later dies, the successor beneficiary must empty the account by the end of that original 10-year window.³

The Annual Distribution Trap

Here’s where beneficiaries get tripped up. If the original owner died on or after their required beginning date (meaning they had already started or were required to start taking distributions), you must take annual distributions during each of the first nine years of the 10-year period, in addition to emptying the account by year 10.⁵ If the owner died before their required beginning date, you can take distributions on any schedule as long as the account is empty by the deadline.

The IRS waived penalties for missed annual distributions in 2021 through 2024 while finalizing the regulations. Many beneficiaries assumed they could simply wait until year 10 to withdraw everything. That grace period is over. Missing the annual requirement now triggers the same 25% excise tax that applies to any missed distribution.²

Contributing to an IRA Past 70½

Before 2020, you were cut off from contributing to a traditional IRA once you turned 70½. The SECURE Act removed that age cap. As long as you have earned income, you can contribute to a traditional or Roth IRA at any age.⁶

For 2026, the annual IRA contribution limit is $7,500. If you’re 50 or older, you can add $1,100 in catch-up contributions, bringing the total to $8,600.⁷

One wrinkle matters: the contributions must come from earned income like wages, salary, or self-employment. Pension payments, Social Security, and investment income don’t count. If you earn $4,000 from part-time work, $4,000 is the most you can contribute that year regardless of the higher published limit.

Penalty-Free Early Withdrawals for Life Events

The SECURE Act and SECURE 2.0 carved out exceptions to the 10% early withdrawal penalty that normally applies to distributions before age 59½. The income tax on the withdrawal still applies; only the penalty is waived.

Birth or Adoption

New parents can withdraw up to $5,000 from a qualified retirement plan without the 10% penalty within one year of a child’s birth or a finalized adoption.⁸ If both parents have retirement accounts, each can take $5,000. You have the option to repay the distribution back into a retirement account later.

Domestic Abuse

For distributions after December 31, 2023, victims of domestic abuse can withdraw the lesser of $10,000 (indexed for inflation) or 50% of their vested account balance without the early withdrawal penalty. The participant self-certifies eligibility, and the distribution must occur within one year of the abuse.⁹ The amount can be repaid within three years.

Charitable Giving Straight From Your IRA

The two laws created an unusual split. Your required distribution age is 73, but the age for making qualified charitable distributions from an IRA stayed at 70½. You can start directing IRA funds to charity before you’re even required to take distributions.

A qualified charitable distribution transfers money directly from your IRA to a qualifying charity. The amount doesn’t count as taxable income, which is often better than taking a distribution and then donating the cash. For 2026, you can make qualified charitable distributions of up to $111,000 per year. SECURE 2.0 also created a one-time option to direct up to $55,000 from an IRA to a split-interest charitable entity such as a charitable remainder trust.¹⁰ The transfer must go directly from the IRA custodian to the charity. If the check hits your bank account first, it’s just a regular distribution.

What Changed for Workers and Employers

401(k) Access for Part-Time Workers

Plans used to require 1,000 hours in a single year to qualify, which locked out many part-timers. The SECURE Act let part-time workers qualify after 500 hours per year for three consecutive years. Starting January 1, 2025, SECURE 2.0 shortened that to two consecutive years and extended the rule to 403(b) plans covered by ERISA. Employers aren’t required to match contributions for these workers, but they must let you defer part of your paycheck into the plan.

Roth 401(k) Distributions No Longer Required

Before SECURE 2.0, designated Roth accounts inside employer plans were subject to required minimum distributions even though Roth IRAs were not. Starting in 2024, Roth accounts in employer-sponsored plans are no longer subject to required distributions during the owner’s lifetime. You no longer need to roll a Roth 401(k) into a Roth IRA just to avoid forced withdrawals.

Student Loan Matching

SECURE 2.0 allows employers to treat an employee’s qualifying student loan payments as if they were elective deferrals for purposes of the company match. In practice, you can receive a 401(k) match based on what you’re paying toward student debt even if you aren’t contributing to the plan itself. The match must be offered at the same rate as the regular deferral match, and the employee must certify their loan payments annually.¹¹

Emergency Savings Accounts

Employers can now attach pension-linked emergency savings accounts to their defined contribution plans. These accept after-tax Roth contributions up to a $2,500 balance (indexed for inflation), and withdrawals are available at the participant’s discretion at least once per calendar month with no need to show an emergency. The first four withdrawals each plan year cannot carry any fees.¹² Only non-highly-compensated employees are eligible.

Super Catch-Up for Ages 60 Through 63

The standard 401(k) catch-up for participants 50 and older is $8,000 in 2026. SECURE 2.0 created a larger catch-up for participants aged 60, 61, 62, or 63: up to $11,250 in additional contributions, bringing their total 401(k) deferral limit to $35,750 for the year.⁷ Once you turn 64, you drop back to the standard $8,000 catch-up.

Small Business Startup Credits

Small employers with 100 or fewer employees can claim a tax credit for the administrative costs of launching a retirement plan. The credit lasts three years and covers 100% of eligible startup costs for employers with 50 or fewer employees, or 50% for employers with 51 to 100 employees, up to $5,000 per year. A separate $500 annual credit is available for three years to employers that add automatic enrollment. SECURE 2.0 added a further credit for the actual employer contributions made to employee accounts, worth up to $1,000 per participant for the smallest employers in the first two plan years.¹³

The SECURE Act also created pooled employer plans, which let unrelated small businesses join a single professionally managed retirement plan. If one employer in the pool fails to meet its obligations, the rest of the plan remains qualified,¹⁴ and pooling administrative costs can lower per-employer fees.

1
Internal Revenue Service. Retirement Topics – Required Minimum Distributions (RMDs)
2
Internal Revenue Service. Retirement Plan and IRA Required Minimum Distributions FAQs
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Internal Revenue Service. Retirement Topics – Beneficiary
4
Internal Revenue Service. Required Minimum Distributions for IRA Beneficiaries
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Internal Revenue Service. Notice 2024-35 – Certain Required Minimum Distributions for 2024
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Internal Revenue Service. Retirement Topics – IRA Contribution Limits
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Internal Revenue Service. 401(k) Limit Increases to $24,500 for 2026, IRA Limit Increases to $7,500
8
Office of the Law Revision Counsel. 26 U.S. Code 72 – Annuities; Certain Proceeds of Endowment and Life Insurance Contracts
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Internal Revenue Service. Guidance on Domestic Abuse Victim Distributions Under Section 72(t)(2)(K) of the Code
10
Internal Revenue Service. 2026 Amounts Relating to Retirement Plans and IRAs, as Adjusted for Changes in Cost-of-Living
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Internal Revenue Service. Guidance Under Section 110 of the SECURE 2.0 Act
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U.S. Department of Labor. FAQs – Pension-Linked Emergency Savings Accounts
13
Internal Revenue Service. Retirement Plans Startup Costs Tax Credit
14
Internal Revenue Service. 7.11.7 Multiple Employer Plans