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The SECURE Act 2.0 (signed into law in December 2022) made sweeping changes to 401(k) plans, including raising the RMD age to 73 (headed to 75 in 2033), creating a "super catch-up" contribution for workers ages 60 to 63, eliminating RMDs from Roth 401(k) accounts, allowing employer matches on student loan payments, and expanding 401(k) access to long-term part-time workers. These changes are being phased in between 2023 and 2027. Understanding which rules are now active is critical for maximizing your retirement savings in 2026.
I have been a fee-only CFP for over a decade, and I can tell you honestly: most people spend more energy watching their 401(k) balance fluctuate than learning the rules that govern it. That is a costly mistake.
The SECURE Act 2.0 is one of the most significant pieces of retirement legislation since the original SECURE Act of 2019. It touches nearly every part of the retirement savings ecosystem, from how long you can let money grow tax-deferred, to who can contribute in the first place.
What makes this law particularly important is that it is not fully implemented yet. Changes are being phased in through 2027. If you are not paying attention, you will miss contribution windows, misjudge your RMD timing, or leave employer matches on the table.
I graduated from the University of Chicago Booth School of Business, and one thing they drilled into us is that understanding the structure of the rules matters more than chasing returns. The SECURE Act 2.0 changes the structure. Here is what you need to know right now.
This is the most underused provision in the law, and it is a genuine opportunity.
Under previous rules, anyone age 50 or older could contribute an extra $7,500 per year on top of the standard 401(k) limit. SECURE 2.0 created a higher tier specifically for workers ages 60, 61, 62, and 63: a "super catch-up" equal to the greater of $10,000 or 150% of the standard catch-up amount.
As of 2025 (the most recently confirmed figures from the IRS), the math works like this: 150% of $7,500 equals $11,250. So if you are between 60 and 63, you can contribute up to $11,250 in additional catch-up contributions, for a total potential contribution of $34,750 in a single year ($23,500 base + $11,250 super catch-up). Verify the current limits for 2026 at IRS.gov, as these figures adjust annually for inflation.
Example: A 62-year-old earning $120,000 per year (in the 22% federal income tax bracket for a single filer) who maxes out their traditional 401(k) at $34,750 reduces their taxable income to $85,250. At the 22% bracket, that is a federal tax savings of roughly $7,645 in a single year, money that stays in your retirement account instead of going to the IRS.
If you are in this four-year window between 60 and 63, this is one of the most powerful tax moves available to you. Use it.
Before SECURE 1.0 (2019), you had to start taking Required Minimum Distributions from your 401(k) and traditional IRA at age 70.5. SECURE 1.0 pushed that to 72. SECURE 2.0 pushed it again: to 73 for anyone born between 1951 and 1959, and to 75 for anyone born in 1960 or later.
Why does this matter? Because every year you delay an RMD is another year that money grows tax-deferred. For a $500,000 account earning 7% annually, the difference between taking RMDs at 72 versus 75 is approximately $115,000 in additional growth over three years, before taxes. That is real money.
However, delaying RMDs is not always the right call. If your traditional 401(k) and IRA balances are large and growing, you may be setting yourself up for massive taxable distributions later, potentially pushing you into a higher bracket, triggering Medicare IRMAA surcharges, and creating a larger tax burden for your heirs.
This is why Roth conversions during the years between retirement and age 73 (sometimes called the "conversion window") deserve serious attention. I work through this calculation with every client who is approaching retirement, because the decision affects not just their tax bill, but their estate.
Starting in 2024, employers are allowed (not required) to match employee student loan payments as if they were 401(k) contributions. This means if you are paying $500 per month on your student loans and not contributing to your 401(k), your employer can now put money into your retirement account on your behalf.
This provision exists because many younger workers have felt forced to choose between paying down debt and saving for retirement. Now they do not have to make that choice at their employer's discretion.
If you are carrying student loan debt and your employer has implemented this benefit, ask your HR department immediately. The match goes directly into your 401(k), grows tax-deferred, and does not require you to redirect a dollar of your paycheck.
According to the Employee Benefit Research Institute (EBRI), workers with student loan debt accumulate significantly less in retirement accounts in their 20s and 30s, creating a compounding disadvantage that follows them for decades. This provision will not eliminate that gap, but it closes it.
This is a big one. Prior to 2024, Roth 401(k) accounts were subject to Required Minimum Distributions during the owner's lifetime, unlike Roth IRAs. This meant you had to take distributions from your Roth 401(k) even if you did not need the money, which undermined one of the key advantages of Roth accounts.
SECURE 2.0 eliminated this requirement. Starting in 2024, Roth 401(k) accounts are treated like Roth IRAs: no RMDs during your lifetime.
The practical implication: if you are contributing to a Roth 401(k) at work, you no longer need to roll it into a Roth IRA at retirement just to avoid RMDs. You can leave it in the plan and let it grow tax-free for as long as you wish.
For a 65-year-old with $300,000 in a Roth 401(k) who does not need that income, this change means the account can potentially grow to $600,000 over ten years (at 7% annualized) completely tax-free, with no mandatory withdrawals forcing a taxable event.
SECURE 1.0 began a phased expansion of 401(k) eligibility to long-term part-time workers. SECURE 2.0 accelerated it. Starting in 2025, employees who work at least 500 hours per year for two consecutive years (down from three years under SECURE 1.0) must be eligible to contribute to their employer's 401(k) plan.
This matters enormously for women, who are disproportionately represented in part-time work due to caregiving responsibilities. According to the Bureau of Labor Statistics, women account for approximately 64% of part-time workers in the United States. For decades, those workers were shut out of employer-sponsored retirement plans.
If you work part-time and have been with the same employer for two or more years, ask your HR department whether you are now eligible. This is newly active, and many workers do not know to ask.
SECURE 2.0 allows employers to add a Pension-Linked Emergency Savings Account (PLESA) to their 401(k) plans. These accounts are designed for non-highly-compensated employees (those earning under approximately $160,000, adjusted for inflation) and allow contributions of up to $2,500, held in a liquid account connected to the retirement plan.
Withdrawals from a PLESA in the first four years are limited: one per month, and specific percentages based on how long the account has been open. After four years, withdrawals are unrestricted. No 10% early withdrawal penalty applies.
The logic behind this provision: one of the biggest reasons people take 401(k) hardship withdrawals (and pay taxes plus a 10% penalty) is that they have no emergency fund. By building the emergency fund inside the retirement plan infrastructure, SECURE 2.0 tries to protect long-term savings from short-term crises.
This is one of the most underused and misunderstood provisions in the entire retirement rulebook, and it is especially important for anyone planning an early retirement between ages 55 and 59.5.
Under IRS rules (specifically IRC Section 72(t)(2)(A)(v)), if you separate from service, meaning you retire, are laid off, or otherwise leave your employer, in or after the calendar year you turn 55, you can take distributions from that employer's 401(k) with absolutely no 10% early withdrawal penalty. Ordinary income taxes still apply, but the penalty is gone.
SECURE Act 2.0 expanded this rule for certain public safety employees: firefighters with at least 25 years of service can now qualify for penalty-free distributions at age 50, regardless of their calendar-year age at separation.
Three critical details most people get wrong:
First, the account must stay in the employer's 401(k). The moment you roll it into an IRA, you lose this exception permanently. IRAs require you to be 59.5 (or use a 72(t) SEPP arrangement, which is complex and inflexible) to avoid the penalty. Many people roll their 401(k) into an IRA the day they retire out of habit, not realizing they just gave up their best tool for early retirement flexibility.
Second, this only applies to the 401(k) of the employer you are leaving at age 55 or older. If you have old 401(k)s from previous jobs, those do not qualify. The rule is tied to the separation event and the specific plan connected to it.
Third, and this is the planning opportunity most people miss: you can do a partial rollover. You do not have to choose between keeping everything in the 401(k) or rolling everything to an IRA. You can roll a portion of your balance into an IRA (giving you broader investment options and more flexibility) while keeping the portion you will need before age 59.5 in the 401(k), where you can access it penalty-free.
Example of how this strategy works:
Imagine you retire at 57 with $800,000 in your employer's 401(k). You estimate you need $60,000 per year for two and a half years until you hit 59.5, when you can access an IRA without penalty. That is $150,000 of bridge money you need penalty-free access to.
You keep $150,000 in the 401(k) (your penalty-free bridge), and roll $650,000 into an IRA (where you have more investment choices and greater control). You take distributions from the 401(k) as needed between 57 and 59.5, paying ordinary income taxes but no 10% penalty. At 59.5, you switch to drawing from the IRA.
For a single filer withdrawing $60,000 per year from a traditional 401(k) with no other income, you would be in the 22% federal tax bracket in 2025 (which applies to taxable income between $47,150 and $100,525 for single filers). Your federal tax on $60,000 would be approximately $8,206, which is the standard deduction ($14,600 in 2025) bringing taxable income to $45,400, keeping you in the 12% bracket for most of that amount. No penalty. This is a powerful and underused retirement income bridge.
One important caveat: not every 401(k) plan allows partial distributions or in-service distributions to a separated employee. Check your specific plan documents or contact your plan administrator before building this strategy into your retirement plan.
This is one of the most creative provisions in SECURE 2.0. Starting in 2024, unused 529 plan funds can be rolled into a Roth IRA for the 529 beneficiary, subject to these conditions: the 529 must have been open for at least 15 years, the annual rollover cannot exceed the Roth IRA contribution limit for that year ($7,000 in 2025, the most recently confirmed figure), and the lifetime maximum rollover is $35,000.
For families who over-funded a 529 or whose child received a scholarship, this eliminates the old choice between taking a taxable and penalized withdrawal or leaving the money stranded. Instead, that money can seed a Roth IRA for the beneficiary and grow tax-free for decades.
Divorce changes everything about your financial picture, including your retirement accounts. A 401(k) cannot simply be "split" in a divorce. It requires a Qualified Domestic Relations Order (QDRO), a court-issued document that instructs the plan administrator how to divide the account.
At ORO (oroworks.com), I built a platform specifically to help women navigate the financial complexity of divorce, including retirement asset division. Many women I work with do not realize that a 401(k) split via QDRO can be done without triggering the 10% early withdrawal penalty, that the SECURE 2.0 rules affect how the receiving spouse's RMDs are calculated, or that Roth 401(k) funds transferred via QDRO retain their tax-free status.
If you are going through a divorce and there are retirement accounts involved, the rules matter as much as the numbers. Do not rely solely on your divorce attorney for the financial analysis. A CFP who specializes in divorce financial planning can save you far more than their fee.
Q: I am retiring at 57. Can I access my 401(k) without the 10% penalty even though I am not yet 59.5?
A: Yes, if you separate from service in or after the calendar year you turn 55, you can take distributions from that employer's 401(k) without the 10% early withdrawal penalty. This is called the Rule of 55, and it applies only to the 401(k) at the job you are leaving, not to IRAs or old 401(k)s from previous employers. Ordinary income taxes still apply. Critically, if you roll the account into an IRA before taking distributions, you lose this exception. A smart strategy is to do a partial rollover: keep the amount you need to live on before age 59.5 inside the 401(k) for penalty-free access, and roll the remainder to an IRA for broader investment flexibility. Not all plans allow partial distributions, so confirm your plan's rules before building this into your retirement income strategy.
Q: Does SECURE Act 2.0 affect my traditional IRA as well as my 401(k)?
A: Yes. The RMD age increase to 73 (and eventually 75) applies to traditional IRAs, not just 401(k)s. The Roth IRA has never required RMDs during the owner's lifetime, so that remains unchanged. The catch-up contribution changes are 401(k)-specific, though IRAs have their own catch-up rules. The 529-to-Roth rollover provision applies to Roth IRAs specifically, not 401(k)s. Always confirm the current rules at IRS.gov or with a fee-only CFP, because implementation dates vary by provision.
Q: If I was already taking RMDs under the old rules, do the new ages apply to me?
A: No. If you were already required to take RMDs before the new law took effect, you must continue taking them. The new ages apply to people who had not yet reached their RMD start date when the law changed. Specifically, if you turned 72 in 2023 or later, you fall under the new age-73 rule. If you were born in 1960 or later, you will not be required to start RMDs until age 75 under the current law.
Q: My employer has not implemented the student loan match provision. Can they be required to?
A: No. The student loan match is optional for employers. SECURE 2.0 gives employers permission to offer it but does not mandate it. If your employer does not currently offer this benefit, you can raise it with your HR or benefits team. Some payroll and 401(k) platform providers are still building the infrastructure to support it, so adoption has been gradual.
Q: Can I contribute to a PLESA (emergency savings account) if my 401(k) plan does not offer one?
A: No. PLESAs are an optional feature that employers must add to their plans. If your employer's 401(k) does not include one, you cannot create one on your own within that plan. Your best alternative is to build an emergency fund in a high-yield savings account (HYSA) outside of your retirement accounts. A good target is three to six months of essential expenses in a liquid, FDIC-insured account.
Q: Does the $35,000 lifetime 529-to-Roth rollover limit reset each year?
A: No. The $35,000 is a lifetime cap per beneficiary, not an annual one. You can roll over up to the annual Roth IRA contribution limit each year (for example, $7,000 in 2025), but once the total reaches $35,000, no further rollovers are allowed. Also note that the 529 must have been open for at least 15 years, and the most recent contributions (and their earnings) from the past five years are not eligible for rollover.
Q: What happens to SECURE 2.0 benefits if I leave my employer before the rules are fully phased in?
A: Your accrued balance in your 401(k) is always yours to roll over or keep, regardless of which employer you work for. If you leave and roll your 401(k) into a traditional IRA, the new IRA is governed by IRA rules (including the new RMD ages, but not 401(k)-specific features like PLESAs or employer matches). If your new employer offers a better plan, you may be able to roll your old 401(k) into it. Always compare the investment options, fees, and features before deciding.
Q: I am self-employed. Do SECURE Act 2.0 changes apply to my Solo 401(k)?
A: Yes, many of them do. The RMD age increase, the catch-up contribution super-sizing for ages 60 to 63, and the Roth 401(k) RMD elimination all apply to Solo 401(k) plans. Solo 401(k)s do not have employees, so the student loan match and PLESA provisions are not relevant. The rules for Solo 401(k)s can be slightly different from employer-sponsored plans, so work with a CPA or CFP familiar with self-employment retirement planning to get the details right.
SECURE Act 2.0 is not just a legislative footnote. It is a genuine opportunity to capture more tax-deferred growth, protect your savings from premature RMDs, and access retirement benefits you may not have had before. The worst thing you can do is ignore these changes and keep running your finances on the old rules. The second-worst thing is assume these rules are so complex you cannot understand them. They are not.
If you want to make sure you are taking full advantage of what SECURE Act 2.0 offers, I would love to help. I offer a free initial consultation with no sales pressure and no products to sell. Everything I do is fee-only and fiduciary, which means I am legally required to put your interests first.
Schedule your free consultation: goldenwealthcapital.com/free-consultation
Golden Wealth Capital3626 Fair Oaks Blvd., Suite 100Sacramento, CA 95864Serving clients nationwide
Pamela Rodriguez, CFP® #254840 is the founder of Golden Wealth Capital and ORO (oroworks.com). She is a fee-only, fiduciary Certified Financial Planner serving clients in Sacramento and nationwide. Pamela graduated from the University of Chicago Booth School of Business and has been featured in the Wall Street Journal, CNBC, Fox News, Yahoo Finance, and US News. She serves as Board Treasurer of the Financial Planning Association of Northern California. Pamela specializes in retirement planning, divorce financial planning, and helping women build lasting wealth.
This article is for educational and informational purposes only. It does not constitute personalized financial, tax, or legal advice. Tax rules and contribution limits change annually and vary by individual circumstance. Verify all figures at IRS.gov and consult a qualified financial advisor, CPA, or attorney before making decisions about your retirement accounts.
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