Getting to know SECURE 2.0 Act

Increased ages for RMDs

Required minimum distributions (RMDs) for people who reach age 72 after 2022 and age 73 before 2033 can start at age 73. Individuals who reach age 74 after 2032 can start RMDs at age 75.

In addition, the excise tax for delayed or insufficient RMDs is reduced from 50% to 25%.

Expanding automatic features

Starting in 2025, employers offering new 401(k) and 403(b) plans will be required to automatically enroll workers at 3% to 10% of the employee's pay. Automatic escalation will also be required for these plans, increasing contributions by 1% a year, up to 10% to 15% of compensation.

Emergencies become exempt from 10% penalty

Starting in 2024, Americans under age 59½ can withdraw up to $1,000 for an unforeseeable personal or family expense (subject to certain conditions) without paying the 10% early withdrawal penalty.

Saver's Credit to be payable as a match

Starting in 2027, the existing retirement savings contributions credit (Saver's Credit) will become a matching contribution from the federal government, available for lower- and middle-income workers.

Increased catch-up contributions

Beginning in 2025, people ages 60 to 63 will have increased catch-up contribution limits, capped at the greater of:

• $10,000, or
• 50% more than the regular catch-up amount for the year.

Roth enhancements

For 401(k), 403(b), and governmental 457(b) plans:

• Roth distributions are no longer subject to RMD rules, aligning with Roth IRAs.
• Employers may now make Roth matching or nonelective contributions, if they choose to.