Broker Check
Staying SECURE in Retirement

Staying SECURE in Retirement

January 06, 2023

Key Takeaways

  • SECURE 2.0 brings many retirement planning enhancements and opportunities for savers and retirees
  • Required Minimum Distribution (RMD) ages are increasing again over time
  • Additional Catch-Up Contributions will be available to certain individuals
  • A Retirement Plan “Lost and Found” national database will be created
  • Unused 529 Plan funds may be rolled to Roth IRAs after meeting qualifications
  • Expanding qualifying events for Emergency Withdrawals
  • Many other enhancements for employer-sponsored retirement plans, emergency savings, qualified charitable deductions, mistake relief, and more!

Major changes are (again) coming to rules surrounding retirement account distributions, retirement account beneficiaries, Roth accounts, and other actions designed to increase retirement savings for individuals. While not as impactful to retirement planning as the original SECURE Act, the SECURE 2.0 Act can still have profound changes on one’s financial planning framework. We will go over the biggest changes included in the bill here, but remember to discuss this with your financial advisor to learn how it impacts your specific circumstances and plan.



The Setting Every Community Up for Retirement Enhancement (SECURE) Act was passed in December 2019 and brought several changes to the retirement environment. These included pushing back the age at which retirement plan participants need to take required minimum distributions (RMDs), making more workers eligible to participate in an employer retirement plan, and making it easier for small business owners to set up retirement plans that are cheaper and easier to maintain. To help pay for these new provisions, the SECURE Act mandated that non-spouses inheriting IRAs take distributions quicker than before (and thus taking taxes on the income).

The omnibus spending bill passed by Congress in late December 2022 included the SECURE 2.0 Act. The bill is over 350 pages and contains more than 100 provisions designed to improve features of the U.S. retirement planning system. While this version of the SECURE Act may not have as high or as immediate of an impact on individuals’ retirement strategy, it is broader and touches more parts in the retirement industry. We’ll focus here on the key provisions that potentially have the most impact on your strategy for saving for retirement, taking distributions in retirement, and other opportunities that could prove to be beneficial for your plan.


Required Minimum Distributions

The original SECURE Act increased the age that individuals must begin taking distributions (and paying taxes on) from qualified retirement accounts from the year in which an individual reached age 70 ½ to 72, starting in 2020. This applied to those turning 70 ½ or older in 2020 or later. The SECURE 2.0 Act pushed the age at which RMDs must begin back further.


  • For those who turn 72 in 2023, RMDs will be pushed back by 1 year to age 73
  • Age 73 will continue to be the age at which RMDs begin through 2032
  • Beginning in 2033, RMDs will be pushed back further to age 75


Catch-Up Contribution Limits

A catch-up contribution is a type of retirement contribution that allows those 50 and older to make additional contributions to qualified retirement accounts. Currently, those 50 and older can contribute an additional $1,000 per year above the standard contribution to an IRA. The SECURE 2.0 Act increases this amount.


  • Starting in 2025, catch-up limits are increased for certain participants in employer retirement accounts
  • Effective only for those who will be ages 60, 61, 62 and 63
  • Contribution limit increased to the greater of $10,000 or 150% of the regular catch-up contribution amount for such plans in 2024

 Also starting in 2024, the IRA catch-up contribution limit will automatically adjust for inflation with inflation adjustments made in increments of $100.


Retirement Plan ‘Lost and Found’

Most individuals switch jobs multiple times in their careers and keeping track of old accounts can be difficult. The Act includes a section that creates a national online searchable lost and found database for retirement plans at the Labor Department. This must be created within two years and allows savers to search for contact information of their plan administrator.


 529 to Roth IRA Rollovers

A 529 plan is a tax-advantaged account that can be used to pay for education costs. Although a great tool for education planning, one concern for these types of accounts is what happens if the account is overfunded. Before the SECURE 2.0 Act, unused or leftover funds could be withdrawn from the account, but they were subject to income taxes and penalties on the earnings portion. The new Act creates a pathway to move these funds to a Roth IRA. This could be an intriguing option for some but comes with multiple caveats.


  • Beginning in 2024
  • There is a $35,000 lifetime limit on such transfers
  • The 529 account will need to have been in existence for at least 15 years in order to qualify
  • Any contributions (and earnings on those contributions) made in the last 5 years are ineligible to be rolled over
  • The Roth IRA receiving the funds must be in the name of the beneficiary of the 529 plan


Emergency Withdrawals

The IRS imposes penalties for early withdrawals from retirement accounts. Specifically, funds withdrawn prior to age 59 ½ are subject to a 10% penalty. This is to ensure that funds in these accounts are actually used for retirement. Over the years, a number of exceptions have been created to ease the burden of these penalties to help pay for unexpected expenses.

The SECURE 2.0 Act expands this list once again:

  • Age 50 Public Safety Worker Exception now includes private-sector firefighters and state and local corrections officers, and individuals who have worked for their employer for 25 years, but separated from them before age 50
  • Permanently reinstates Qualified Disaster Recovery Distributions
  • Individuals who are terminally ill
  • Victims of domestic abuse
  • Creation of a new, broad emergency withdrawal exception that is capped at $1,000 and limited to no more than 1 such distribution per calendar year

These are some of the most important provisions in the new bill. However, there are many more that may apply to your unique situation, including new relief for retirement account mistakes, the creation of linked emergency savings accounts, changes to qualified charitable donations, retirement plan contributions for those with student loan debts, and expanded access to ABLE accounts.

Be sure to schedule some time in the new year with your financial advisor to see how any of the new provisions in the SECURE 2.0 Act affect your retirement plan.