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Understanding How the SECURE Act 2.0 Impacts Your Retirement

Posted by Doug Hutchinson | CFA®, Director of Research and Trading
January 23, 2023

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The Consolidated Appropriations Act of 2023, passed by Congress and signed into law by the President, contained several retirement related provisions collectively known as the “SECURE Act 2.0.”  The SECURE Act 2.0 is a follow up to the original Setting Every Community Up for Retirement Enhancement (SECURE) Act passed and signed into law in December 2019. 

Here are some of the key provisions of this new law: 

Raising the Required Minimum Distribution (RMD) Starting Age 

The SECURE Act 2.0 pushes back the age at which retirees must begin taking RMDs to age 75.  This provision will be phased in over the next ten years, so the starting age for RMDs will be pushed back to age 73 in 2023 and then pushed back again to age 75 in 2033.

The original SECURE Act moved the starting age to 72 in 2020 and the SECURE Act 2.0 has no impact on the RMD starting age of retirees who have already begun taking RMDs. 

Using IRA Distributions for Giving 

While the age at which RMDs begin will be changing, the SECURE Act 2.0 does not change the age at which Qualified Charitable Distributions (QCDs) can be made.2 The earliest age at which an individual can make a QCD will still be 70 ½.  A QCD is an otherwise taxable distribution from an IRA that is paid directly from the IRA to a qualified charity. 
Also, the current annual limit of $100,000 for QCDs will be indexed to inflation going forward.3 

Higher Catch-Up Contribution Limits 

Effective in 2025, workers between the ages 60 and 63 will see the catch-up contribution limits in certain employer retirement plans such as a 401(k) or 403(b) increased to the greater of $10,000 or 150% of the regular catch-up contribution limit.
Also, all catch-up contributions limits for all age groups will be indexed to inflation (including the IRA catch-up contribution annual limit which is currently $1,000) starting in 2024.

Additional Catch-Up Contribution Rules 

Also starting in 2024, all catch-up contributions for those making $145,000 or more must be made to a Roth account in after-tax dollars.  In other words, catch-up contributions cannot be made in pre-tax dollars to a retirement account if you make more than $145,000 in a year.6 

529 to Roth IRA Transfers 

Effective in 2024, the SECURE Act 2.0 allows individuals to move unused funds in 529 plans to their Roth IRA under certain circumstances.7 Several conditions must be satisfied to make these penalty-free transactions including: 
  • The 529 plan must have been open for at least 15 years 
  • The annual limit that can be moved to a Roth IRA from a 529 plan is the annual limit on Roth contributions ($6,500 this year). 
  • The lifetime maximum amount that can be moved to a Roth IRA from a 529 plan is $35,000 
  • Contributions (and earnings on those contributions) to the 529 plan in the last 5 years are not allowed to be moved to a Roth IRA 

Importantly, these penalty-free transfers from 529 plans to Roth IRAs are not subject to the Roth IRA income limits (currently single filers who make $153,000 or more and joint filers who make $228,000 or more this year are not eligible to make Roth IRA contributions). 

Student Loan Matching 

Starting in 2024, employers will be allowed to “match” their employee’s student loan payments with retirement contributions to the employee’s retirement account.8 Currently, employers can only provide a match to their employee’s retirement contributions.  In other words, student loan borrowers will soon be able to benefit from an employer’s matching contribution even if they are not able to contribute to their own retirement account. 

The common theme surrounding most of the provisions in the SECURE ACT 2.0 is providing additional opportunities to build your retirement nest egg.  As always, reach out to your Wealth Manager to better understand how the changes in the SECURE Act 2.0 will apply to your unique financial situation. 


About the Author: A member of the WrapManager Investment Policy Committee, Doug Hutchinson, CFA® is responsible for developing and refining our money manager due diligence and review standards. He is also responsible for monitoring and evaluating current and prospective money managers. 

Doug graduated from the University of California, Santa Barbara with a BA in Business Economics. He is a CFA® Charterholder and an active member of the CFA® Society of San Francisco. 


1 https://www.schwab.com/learn/story/secure-20-how-does-it-affect-retirement-plans 

2 https://www.fidelitycharitable.org/articles/secure-act-2-0-retirement-provisions.html 

3 https://www.schwab.com/learn/story/secure-20-how-does-it-affect-retirement-plans  

4 https://www.schwab.com/learn/story/secure-20-how-does-it-affect-retirement-plans 

5 https://www.fidelity.com/learning-center/personal-finance/secure-act-2 

6 https://tickertape.tdameritrade.com/retirement/secure-act-2-0-now-law-how-it-s-likely-to-change-your-retirement-planning--19304 

7 https://smartasset.com/financial-advisor/secure-act-529  

8 https://www.yahoo.com/now/secure-2-0-act-student-184323962.html 

Retirement Planning Saving for Retirement RMD Required Minimum Distribution