SECURE Act

SECURE stands for the Setting Every Community Up for Retirement Enhancement Act.

• SECURE Act (1.0): Enacted December 2019
• SECURE 2.0: Enacted December 2022 as part of the Consolidated Appropriations Act, 2023

Together, these laws represent the most significant retirement‑plan reforms in over a decade, affecting both employer‑sponsored plans and individual taxpayers.

🔑 Key Provisions of SECURE 2.0 (2025 Focus)

🟢 Required Minimum Distributions (RMDs)

✅ Delays when retirees must begin withdrawing funds from tax‑deferred accounts.

🟢 Catch‑Up Contributions

• Before SECURE 2.0:
  • $7,500 for individuals age 50+
• SECURE 2.0 (Starting 2025):
  • Ages 60–63 may contribute up to $10,000
  • Or 50% more than the regular catch‑up limit, if higher

✅ Allows late‑career workers to accelerate retirement savings.

🟢 Automatic Enrollment

• New 401(k) and 403(b) plans must:
  • Automatically enroll eligible employees at 3%–10%
  • Increase annually up to 10%–15%
• Applies to plans established after December 29, 2022

✅ Boosts participation through default enrollment.

🟢 Part‑Time Worker Eligibility

• Before: 3 consecutive years of service required
• SECURE 2.0:
  • Reduced to 2 years
  • Expanded to include 403(b) plans

✅ Expands coverage for long‑term, part‑time employees.

🟢 Student Loan Matching

• Employers may match student loan payments with retirement plan contributions
• Employees can receive employer matches without making their own plan contributions

✅ Helps workers save for retirement while paying off student debt.

🟢 Emergency Savings Accounts

• Employers may offer linked emergency savings accounts
• Contributions capped at $2,500
• Connected to employer retirement plans

✅ Provides penalty‑free access to short‑term emergency funds.

🟢 529 Plan to Roth IRA Rollovers

• Up to $35,000 can be rolled from a 529 plan to a Roth IRA
• Requirements:
  • 529 account must be open for 15+ years
  • Subject to annual Roth contribution limits

✅ Allows unused education savings to be repurposed tax‑free.

👤 Impact on Individual Taxpayers

✅ More Flexibility

• Delayed RMDs allow retirement funds to grow longer
• Increased catch‑up limits support late‑career savings

✅ Expanded Access

• Part‑time workers and student loan borrowers gain new retirement benefits

✅ Simplified Planning

• Automatic enrollment and emergency savings features make saving easier and more consistent

✅ Tax‑Free Opportunities

• 529‑to‑Roth rollovers provide a new planning tool for families

📘 Examples

✅ RMD Delay Example

A taxpayer born in 1962 will now begin RMDs at age 75, rather than age 72, allowing additional years of tax‑deferred growth.

✅ Catch‑Up Contribution Example

A 61‑year‑old can contribute $10,000 in catch‑up contributions to a 401(k) in 2025, compared to the prior $7,500 limit.

✅ Student Loan Matching Example

An employee making only student loan payments can still receive employer retirement contributions, even if they don’t directly contribute to the plan.