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Key takeaways

  • The age for required minimum distributions has increased, and the penalty for not taking them has decreased.
  • In 2025, many companies with 401(k) or 403(b) plans established on or after December 29, 2022 will be required to automatically enroll eligible employees.
  • In 2024, employers may make contributions to an employee’s retirement account that match the amount the employee is paying toward their student loan debt
  • In 2024, savers who have had 529 accounts for at least 15 years may be able to roll up to a lifetime maximum of $35,000 from the 529 accounts into Roth IRA accounts (subject to annual Roth contribution limits).
  • There are many provisions, but the end result is clear: saving for retirement could become easier in the next few years


Adam Frank

Managing Director, Head of Wealth Planning and Advice, J.P. Morgan Wealth Management

Laura Behm

Vice President, Retirement Product Manager, J.P. Morgan Wealth Management

The SECURE Act 2.0 is a set of provisions that were included in the omnibus spending bill passed by Congress in December. These provisions update rules around retirement, including increased ways to contribute and greater flexibility in accessing funds.

Some key provisions of the SECURE Act 2.0 include changes to required minimum distributions (RMDs), increased catch-up contributions for qualified retirement plans and the option for employer plan sponsors to offer emergency savings accounts to employees.

In this article, we will take a closer look at the SECURE Act 2.0.

Effective in 2023

The provisions that go into effect in 2023 include:

Required minimum distributions (RMDs)

Under the SECURE Act 2.0, the age upon which you must start taking required minimum distributions (RMDs) has been increased. If you were born in 1951 through 1958, the RMD age is now 73; if you were born in 1959, there is a technical problem with SECURE Act 2.0 increasing the RMD age, which needs further clarification from the IRS; if you were born in 1960 or after, the RMD age is now 75.

The penalty for not taking your entire RMD has been significantly reduced. The current 50% penalty for not taking the full RMD amount has been reduced to 25%, and if you find and correct the error before the IRS does, and within a two-year correction window, the penalty will be further reduced to 10%. It is important to note that the penalty is only assessed on the amount of the RMD that wasn't taken, not necessarily on the total RMD.

Qualified charitable distributions (QCDs)

The qualified charitable distributions (QCDs) limit of $100,000 will now be indexed for inflation. In addition, up to $50,000 (also indexed) can be distributed – one time, not annually – to a charitable gift annuity, a charitable remainder annuity trust or a charitable remainder unitrust.

Beginning in 2024

The provisions that go into effect in 2024 include:

IRA catch-up contributions

The maximum IRA catch-up contribution amount for people age 50 and older (which is currently $1,000) will be indexed for inflation starting in 2024.

Changes to employer-provided Roth accounts

Employer-provided Roth accounts will no longer require RMDs pre-death. Currently, RMDs are required from employer-provided Roth accounts such as Roth 401(k)s. The SECURE Act 2.0 includes a provision that removes the requirement for pre-death distributions from Roth accounts in employer plans.

More ways to access money for emergencies

  • IRA withdrawals: Up to $1,000 can be withdrawn annually without penalty if used to pay qualifying emergency expenses, and can be paid back within three years, in which case the tax paid on the repaid amount will be refunded. No further emergency distributions are permissible during the three-year repayment period unless repayment occurs. Victims of domestic abuse can withdraw the lesser of up to $10,000 (indexed) or 50% of the individual’s vested account balance without penalty, and if the amount is repaid within three years, the tax paid on the repaid amount will be refunded. 
  • Employer plan sponsors will have the option to offer employees an emergency savings account option with employee contributions made on a Roth-like basis. 

More support for investing for retirement 

  • Those who are hesitant about 529 plans for fear of the money getting “trapped” in the account may be able to breathe a sigh of relief. Savers who have had 529 accounts for at least 15 years may be able to roll over up to a maximum of $35,000 from the 529 account into a Roth IRA. However, they are still subject to annual Roth contribution limits, and neither contributions made nor earnings generated in the five years prior to the rollover distribution can be rolled into a Roth IRA. 
  • Student loan payment match: The SECURE Act 2.0 includes a provision that aims to help employees who may be unable to save for retirement due to their student loan debt. This provision may allow these employees to receive matching contributions to their retirement plan accounts by repaying their student loans. An employer may make matching contributions to a 401(k), 403(b), 457(b) or SIMPLE IRA plan for "qualified student loan payments," which are defined as payments made on any debt incurred by the employee solely for the purpose of paying for their qualified higher education expenses. 

Beginning in 2025 and beyond 

The provisions that go into effect in 2025 or later include:

Automatic enrollment in retirement plans

Many companies will be required to automatically enroll eligible employees in 401(k) or 403(b) plans established on or after December 29, 2022, although employees will have the opportunity to opt out of enrollment. The initial automatic enrollment contribution must be at least 3% but not more than 10% of the employee's salary. The initial contribution amount will increase by 1% each year until it reaches at least 10% but not more than 15%. 401(k) and 403(b) plans established before December 29, 2022 are grandfathered and are not affected by this provision.

Small businesses with 10 or fewer employees, new businesses (those that have been in business for less than three years), church plans, and governmental plans are exempt from this requirement. If you change jobs, make sure to check your enrollment and that it aligns with your budget and goals.

Catch-up contributions

Beginning in 2025, catch-up contribution limits for workplace retirement plans will increase. Currently, employees who are 50 or older are allowed to make catch-up contributions to certain retirement plans. The catch-up contribution limit for 2023 is $7,500 ($3,500 For SIMPLE plans). Under the SECURE Act 2.0, beginning in 2025 this limit will be increased for individuals who are 60 to 63 years old. The new limit will be either $10,000 ($5,000 for SIMPLE plans) or 50% more than the regular catch-up amount, whichever is greater. The increased limit will be indexed for inflation.

Savers Credit

Beginning in 2027, the government will match contributions to workplace retirement plans, IRAs, and ABLE accounts for certain lower-income taxpayers. The SECURE Act 2.0 includes a provision that in many cases will change the credit for contributions to IRAs and retirement plans from a cash payment as part of a tax refund to a federal matching contribution into the taxpayer's IRA or retirement plan account. The match will be 50% of the IRA or retirement plan contributions, up to a total of $2,000 per person.

This match will be gradually reduced for taxpayers who exceed income limits for this “Saver’s Credit”, which are indexed for inflation.

The bottom line

There are many other provisions included in the SECURE Act 2.0. With these changes taking place starting in 2023 and continuing over the next few years, there may be all the more reason to get started saving for retirement today.

Retirement planning can be overwhelming for some. Talking with a professional may help you make the most of your retirement planning. Get started by talking with a J.P. Morgan Advisor.


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