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What is the SECURE Act 2.0 and How Does It Affect Me?

The SECURE Act 2.0 is a new law that will bring major changes to the retirement savings landscape. The original SECURE Act was signed into law in late 2019, but this new legislation expands upon the original measures. Several significant changes will affect people planning and saving for retirement. We know all too well that saving for retirement can be full of unknowns. Whether you’re just starting to save for retirement or already nearing retirement age, our retirement planners can help you fully understand the Secure Act 2.0 and take advantage of the changes.

Overview of the SECURE Act 2.0

The SECURE Act 2.0 (Setting Every Community Up for Retirement Enhancement) is a new law designed to help Americans save more for retirement. The legislation contains a wide range of provisions, including:

  • Age for required minimum distributions (RMDs) goes up to 73 for those who turn 72 in 2023 and 75 in 2033.

  • Most of the new 401(k)s and 403(b)s established after SECURE Act 2.0 becomes law will be required to enroll employees automatically and escalate contributions automatically after December 31, 2024.

  • Low-income retirement savers after December 31, 2026, could qualify for a 50% tax credit up to $2,000 that has to be deposited into an individual’s retirement plan or an IRA.

  • RMDs are eliminated from Roth accounts in 401(k)s and 403(b)s for tax years after December 31, 2023.

  • Catch-up contribution limits will go up for those age 60 and 63 after December 31, 2024, to the greater of two: either $10,000 or 150% of the regular catch-up amount for those 50 and older.

  • Early withdrawal penalties will be eliminated for hardship distributions made by terminally ill employees and those living in declared disaster areas (up to $22,000).

  • The Department of Labor will create an online database within two years after the SECURE Act 2.0 becomes law for employees (and employers) to find orphaned retirement accounts and match them to current plans.

Impact on Retirement Savers

As retirement planners, we know that the SECURE Act 2.0 has several implications for retirement savers. Increasing the age for RMDs means that individuals will have more time to save and grow their retirement funds before being required to withdraw money. The new age 60 and 63 catch-up contribution also gives individuals the ability to contribute more to their retirement plans as they near retirement age.

Retirement Saving Strategies

The SECURE Act 2.0 provides the opportunity for new retirement saving strategies. Having a financial plan in place can help you identify how much you need to save for retirement and what steps you need to take to pursue your goals. As financial and retirement planners, we help our clients determine what types of accounts and funding strategies could benefit them, given their situation.

Reach Out to Our Retirement Planners Today

The SECURE Act 2.0 will bring significant changes to the retirement savings landscape. The legislation will affect people at different stages of their retirement planning journey. Awareness of the changes and how they could impact you is essential. But it’s even more important to take advantage of the opportunities provided by the new provisions. By increasing your retirement savings and having a sound financial plan, you can ensure a more comfortable retirement for yourself and your loved ones. If you have further questions, contact our retirement planners, Andrew Harris, and Jonathan Lopez, today.


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