SECURE 2.0- New Retirement Rules-What You Should Know for 2024!

Photo by Setu Chhaya:

I have always been intrigued by the acronyms that get selected for legislations passed. For a word geek such as myself, I feel like that would be a cool job to have! Don't you think? 

The SECURE {Setting Every Community Up for Retirement Enhancement}  Act was passed end of 2019. The 2019 Act was "designed to encourage more employers to offer retirement plans and incentivize more employees to participate in them". We went over some major provisions of SECURE 1.0 on my post here

SECURE Act 2.0 added more provisions. A few of these will go into effect in 2024 and others further down the road. Let's take a look at some of the most important provisions:

Required Minimum Distributions: 

  • You had to generally take your required minimum distributions {RMDs} beginning at age 72 before SECURE 2.0. Now the "RMD age" is 73 with effect from January 1st, 2023. 
  • If you turned 72 in 2022, you had to take your 1st RMD by April 1st, 2023. 
  • In 10 years, the RMD age will be 75. 
  • The RMD rules for Inherited IRAs have been delayed until 2024. 
  • The penalty for failing to take an RMD is down to 25%. (It was a whopping 50% before.)
  • BIG one: Roth 401(k) accounts are NOT subject to RMD rules under the new Act. Earlier this applied only to Roth IRAs and account holders typically rolled over their Roth 401(k)s to an IRA. Rule kicks in 2024. 
  • The Roth rule above ONLY applies to the account holder before they die. 
  • RMDs from annuities in retirement savings accounts can now be combined. 

Catch Up Contribution Limits

  • For 2024, your maximum 401(k) elective deferral is $23,000. Catch up contributions for those 50 years and older is $7,500. So you can contribute a maximum of $30,500. 
  • Beginning 2025, an additional catch up contribution is available if you are 60, 61, 62 or 63 years old to the greater of $10,000 or 50% more than the regular catch-up amount.  
  • Beginning in 2026, if you are making more than $145,000 or more, your catch up contributions will NOT have a tax deduction and will be considered as made on a Roth basis. 

Student Loan 401k Match

Since student loan payments have resumed and the Supreme Court has struck down student loan debt forgiveness, this next rule could come in very handy if your employer participates. 

Under the new Act, your employer can make a matching contribution to your retirement account based on your student loan payment. This feature is designed to mitigate the effect of a short-fall in retirement contributions for those making loan payments. 

The rule is effective 2024. 

529 Rollover to Roth

There is an option under the new Act to rollover a 529 plan into a Roth IRA effective 2024. 

A few important points of the many requirements that must be met are:

  • The Roth IRA must in the 529 plan beneficiary. 
  •  They should have maintained the 529 for 15 years.
  • Annual limits for the rollovers would have to be within the annual contribution limits. 
  • There would be a $35,000 lifetime limit to what can be rolled over. 

Lost 401k Database

The SECURE 2.0 Act is going to enable creation of a searchable database to help people find the accounts that they may have lost track of. 

The plan is create this within the next 2 years and be housed at the Department of Labor. 

Expanded access to 401(k) & Financial Incentives

401(k) contribution access will be expanded to those working part-time. 

Beginning in 2027, the Saver's Credit will be replaced with the Saver's Match- which is going to be 50% of your IRA or retirement plan contributions up to $2,000 per person within certain income limits. 

Make sure you are talking to your tax advisor and your financial planner about SECURE 2.0 Act. Check to see if any of these changes will be in your favor and what you need to do to put things in place. 

PS: Nepal is still on my mind. The country suffered another devastating earthquake on November 3rd, 2023. If you wish to, please donate towards relief efforts to SEWA International


Consult with an Enrolled Agent for your unique tax needs and make sure your questions are answered. Always remember to read my disclaimer here. If you have any more questions regarding this or other tax matters, contact me via my website



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