The SECURE 2.0 Act, signed into law in December 2022, continues to reshape how Americans save for retirement, with several major provisions now fully in effect and others just kicking in. The biggest 2026 update: high earners age 50+ must now make catch-up contributions on a Roth (after-tax) basis, a rule that was originally set for 2024 but was delayed twice.
Here’s a current look at seven of the most significant SECURE 2.0 Act provisions affecting retirement savers today.
What Is the SECURE 2.0 Act?
SECURE 2.0 builds on the 2019 SECURE Act (Setting Every Community Up for Retirement Enhancement). Both laws lean on behavioral economics — the idea that nudging savers toward good habits works better than strict mandates. The law’s changes are rolling out in phases, with some provisions effective as early as 2023 and others phasing in as late as 2033.
1. Roth Contributions Are More Flexible
Roth accounts have become more attractive under SECURE 2.0 Roth contributions rules. Employers can now let employees direct matching and non-elective employer contributions into Roth accounts instead of pre-tax accounts. Contributions are made with after-tax dollars — there’s no upfront deduction, but withdrawals of compounded gains are tax-free once the account holder is at least 59½ and has held the plan for five years.
Roth adoption has grown substantially: about 90% of 401(k) plans now offer a Roth option, though actual participation still lags — roughly 30% of eligible employees contribute to it. For 403(b) plans, common among teachers, participation sits just under 60%.
2. Required Minimum Distribution (RMD) Age
Savers now have more time to grow retirement accounts before distributions are required. Under SECURE 2.0 RMD changes:
- The RMD age is currently 73 for traditional IRAs, SEP IRAs, SIMPLE IRAs, 401(k)s, and similar plans.
- The age rises to 75 starting in 2033.
- Roth IRA owners never have to take RMDs during their lifetime.
- Roth 401(k) holders are no longer required to take RMDs, a change that took effect in 2024.
3. RMD Penalties Are Lower
The penalty for missing an RMD dropped from 50% to 25% of the amount not withdrawn. That penalty shrinks further, to 10%, if the account owner withdraws the missed RMD and files a corrected return in a timely manner — generally by the earlier of the second year after the missed RMD or before the IRS assesses a penalty.
4. More Penalty-Free Early Withdrawal Options
Early withdrawals before age 59½ are still generally subject to a 10% penalty, but SECURE 2.0 has phased in several new exceptions that are now fully in effect:
- Disaster relief: Savers in federally declared disaster areas can withdraw up to $22,000 penalty-free, with the tax owed spread over three years.
- Terminal illness: Penalty-free withdrawals are allowed for savers who are terminally ill.
- Financial emergencies: Up to $1,000 per year, penalty-free (available since 2024).
- Domestic abuse victims: Up to $10,000, penalty-free (available since 2024).
- Emergency savings accounts: Up to $2,500 if tied to a retirement plan (available since 2024).
- Long-term care expenses: Up to $2,500, penalty-free (available since 2025).
5. Catch-Up Contributions — Including a New Roth Requirement
Savers age 50 and older can put extra money into workplace retirement plans each year. For 2026:
- The standard SECURE 2.0 catch-up contribution limit is $8,000 for 401(k), 403(b), and most 457 plans.
- Savers ages 60–63 get a higher “super catch-up” limit of $11,250 instead of the standard amount.
- The IRA catch-up limit is $1,100 for 2026, now indexed annually for inflation.
The biggest change for 2026: high earners — those with more than $145,000 in prior-year FICA wages from their employer — must now make all catch-up contributions on a Roth (after-tax) basis rather than pre-tax. This requirement was originally scheduled for 2024 but was delayed twice to give payroll providers time to prepare; it became effective January 1, 2026, following final IRS regulations issued in late 2025. If a plan doesn’t offer a Roth option, affected high earners can’t make catch-up contributions at all until one is added.
6. Other Notable Updates
A few additional provisions worth knowing:
- One-time qualified charitable distributions of up to $50,000 are available for savers age 70½ and older.
- SIMPLE IRA contribution limits increased starting in 2024.
- Retirement plan balances can now automatically transfer when a saver changes jobs, reducing forgotten or cashed-out accounts.
- Part-time employees are now generally eligible for workplace plan access, a change that took effect in 2025.
7. 529-to-Roth IRA Rollovers
One of SECURE 2.0’s more notable provisions lets owners of 529 college savings plans redirect up to $35,000 of unused funds into a Roth IRA, a benefit that took effect in 2024. This turns leftover money originally earmarked for education costs into retirement savings without triggering a tax bill for the account owner or the beneficiary. To qualify, the 529 account must have been open for at least 15 years, and the rollover is still subject to annual Roth contribution limits.
What This Means for Your Retirement Plan
With several SECURE 2.0 provisions now fully phased in — and the new Roth catch-up rule just starting for high earners — this is a good time to review how these changes affect your specific situation, whether that’s adjusting how you make catch-up contributions, revisiting your RMD strategy, or considering a 529-to-Roth rollover for education savings you no longer need. For retirees and pre-retirees across Fort Myers and Southwest Florida, coordinating these provisions with your broader retirement income plan can help avoid surprises at tax time.
Frequently Asked Questions
What is the RMD age under SECURE 2.0?
The current RMD age is 73. It will increase to 75 starting in 2033. Roth IRA owners are exempt from RMDs entirely.
Do high earners have to make catch-up contributions in Roth accounts now?
Yes. Starting January 1, 2026, employees age 50+ with more than $145,000 in prior-year FICA wages from their employer must make all catch-up contributions on a Roth (after-tax) basis.
How much can I contribute as a catch-up contribution in 2026?
The standard catch-up limit is $8,000 for 401(k), 403(b), and most 457 plans in 2026. Savers ages 60–63 can contribute up to $11,250 instead. The IRA catch-up limit is $1,100.
Can I still roll over unused 529 funds to a Roth IRA?
Yes. Since 2024, 529 account owners can roll over up to $35,000 (lifetime limit) into a Roth IRA, provided the account has been open at least 15 years and the rollover stays within annual Roth contribution limits.
What happens if I miss an RMD?
The penalty for a missed RMD is 25% of the amount not withdrawn, reduced to 10% if corrected in a timely manner by filing an amended return and taking the missed distribution.
This article is for informational purposes only and does not constitute tax or legal advice. Consult a qualified tax professional or financial advisor regarding your specific situation.
