Securing Your Retirement Future – What You Need to Know About the Secure 2.0 Act

What is Secure 2.0?

On December 29, 2022, the Secure 2.0 Act was signed into law by President Biden as part of the Consolidated Appropriations Act of 2023. The Act has 92 provisions aimed at increasing savings, boosting business incentives, and providing participants with more flexibility when saving for retirement. The SECURE Act (Setting Every Community Up for Retirement Enhancement) of 2019 provided the building blocks for Secure 2.0. Secure 2.0 covers numerous changes to retirement savings for both employers & participants. The Secure 2.0 Act is meant to improve retirement saving options and help Americans prepare for retirement & build a strong financial future.

3 Key Changes with Secure 2.0:

  • Required Minimum Distributions (RMDs) Delayed
    • Section 107 – increases required distribution age from 72 to 73 (beginning Jan 1, 2023)
      • This will increase to the age of 75 in 2033
    • Section 302 – Exercise tax (penalty paid if you do not take RMD) goes from 50% down to 25% as of Dec. 31, 2022
      • If corrected and participant takes RMD in a timely manner, the exercise tax will reduce to 10%
  • Higher Catch-Up Contribution Limits
    • The 2023 catch-up contribution limit for 50+ year old participants who participate in 401(k), 403(b), and most 457 plans is $7,500
      • This amount will increase to the greater of $10,000 or 50% of the regular catch-up amount starting 2025 for participants 60-63
      • Beginning Jan 1, 2024 catch-up contributions made by participants earning over $145,000/year must be made with after-tax dollars
  • Retirement Funds for Emergencies
    • Jan 2, 2024 – Secure 2.0 expand access to retirement funds for personal/family emergencies, victims of natural disasters (retro to Jan 26, 2021), and domestic abuse survivors without incurring the 10% penalty
      • For example: participants access < $1,000 one time per year from retirement savings for emergency expenses (personal or family) without penalty. Domestic abuse survivors can access the lesser of $10,000/50% of retirement savings without penalty
      • This does not apply to CalPERS pension account – the only time you can access CalPERS is when you leave CalPERS employment

Some provisions are set to begin in 2023, however most of them will not go into effect until 2024 or later. See the table below with some key provisions & dates.

Require catch-up contributions to be made on an after-tax Roth basis for participants with wages in excess of $145,000 for the prior calendar year401(k), 403(b) and 457(b) plansTax years beginning after 2023
Permit matching contributions on behalf of employees who are repaying student loans401(k), 403(b), 457(b) and SIMPLE IRA plansPlan years beginning after 2023
Exempt in-plan Roth accounts from lifetime RMDs401(k), 403(b) and 457(b) plansTax years beginning after 2023
Create “starter 401(k)” plans401(k) and 403(b) plansPlan years beginning after 2023
Require new plans to include auto enrollment and auto escalation401(k) and 403(b) plansPlan years beginning after 2024
Increase the catch-up amount for individuals aged 60, 61, 62 and 63401(k), 403(b), 457(b) and SIMPLE IRA plansTax years beginning after 2024
Require long-term part-time employees to join 401(k)s sooner401(k) and 403(b) plansPlan years beginning after 2024
Create in-plan emergency savings accounts401(k), 403(b) and 457(b) plansPlan years beginning after 2023
Permit certain rollovers from 529 accounts to Roth IRAs529 plansDistributions after 2023
Replace the Saver’s Credit with the Saver’s MatchIRAs, 401(k), 403(b), 457(b) and SIMPLE IRA plansTax years beginning after 2026
Create a retirement savings lost and foundDefined contribution and defined benefit plansTo be developed before 2025

The developers at UKG are working on a plan for how this will be deployed in the system and will be communicated in the coming months.


SECURE 2.0 is here. What do you need to know? | J.P. Morgan Asset Management (

Secure Your Retirement Future: Understanding the Changes Brought by the Secure 2.0 Act – CalPERS PERSpective

Disclaimer: These materials are provided for informational purposes only and are not intended as legal or tax advice. Readers of the IBS Blog should contact their legal or tax professionals to discuss how these matters relate to their individual circumstances.

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