SECURE 2.0 Will Impact Retirement Planning Over the Next Decade

Jan 19, 2023

By Theresa Cagle Fry, Senior Vice President and Manager IRAs, Retirement & Education Planning
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In the evening hours of December 29, 2022, a comprehensive package of retirement reforms was signed into law that will reshape retirement planning for years to come. Referred to as SECURE 2.0, the new law builds on the changes that were put into place with the original SECURE Act in 2019. The overall goals of SECURE 2.0 are to expand retirement coverage, increase retirement savings, and provide additional access to retirement savings, along with simplifying and clarifying a number of rules that govern tax-advantaged retirement accounts such as IRAs, 401(k)s, 403(b)s, SEP and SIMPLE IRAs, and other employer-sponsored retirement savings plans.

Many of the Act’s most widely publicized provisions do not go into effect in 2023, such as higher catch-up contribution amounts, plan-linked emergency savings accounts, a government funded saver’s match, and a retirement savings lost and found database. However, this new year brings with it changes to required minimum distributions (RMDs), tax credit expansion for small business owners starting up retirement plans, excise tax relief for individual taxpayers correcting inadvertent errors, as well as new opportunities for Roth savings through employers.

Below are a few highlights of SECURE 2.0 and when these new opportunities will be available to you:

SECURE 2.0 Highlights

Category Description

Effective Date

Required Minimum Distributions (RMDs) RMDs begin at age 73 (increased from age 72)

For 2023 RMDs

Missed RMD penalty tax reduced to 25% from 50%; Reduced to 10% if corrected within the “correction window”

Tax Year 2023

Qualified Longevity Annuity Contracts (QLACs) – which are excluded from RMD calculations until age 85 – can be purchased or exchanged in amounts up to $200,000; 25% limitation removed

Dec. 29, 2022

401(k) and 403(b) Roth balances in employer retirement plans will be excluded from RMD calculations

For 2024 RMDs

RMDs begin at age 75 (increased from 73)


Tax-Free Qualified Charitable Distributions (QCDs) After Age 70 ½ New one-time $50,000 QCD can be made to a split-interest entity such as a charitable gift annuity or charitable remainder trust

For 2023 Gifts

QCD limits (both the $100,000 annual gift and $50,000 one-time gift) are adjusted for inflation

After 2023

Penalty-Free Withdrawals Distributions made on or after a terminal illness diagnosis are now penalty free and may be repaid within 3 years

Paid after Dec. 29, 2022

Emergency withdrawals of up to $1,000 a year may be made penalty-free and may be repaid within 3 years; no other emergency withdrawals can be made until prior withdrawal has been repaid


Up to $10,000 (or 50% of account balance) can be withdrawn penalty free for victims of domestic abuse and may be repaid within 3 years


Qualified birth and adoption withdrawals may be repaid within 3 years; for distributions made prior to enactment, repayment, if made, must be done by December 31, 2025

After Dec. 29, 2022

Up to $22,000 may be distributed penalty free for a federally declared qualified disaster; taxes may be paid and repayment may be made over 3 years

Retroactive to 2021

Hardship distributions available in 403(b) plans


Catch-up Contributions $1,000 IRA catch-up contribution will be adjusted for inflation


Catch-up contributions for participants with income greater than $145,000 must be designated as Roth (excludes salary deferrals to SIMPLEs and SEPs)


Additional catch-up contributions can be made for individuals at ages 60 – 63


Roth Savings Employer matching and non-elective contributions may be made as Roth

Contributions made after Dec. 29, 2022

SEP and SIMPLE contributions can be Roth

Tax Year 2023

Tax Credits for Small Business Retirement Plan Start-up Costs For employers with 50 or fewer employees, the tax credit for retirement plan start-up costs increases to 100% from 50% in the first 3 years ($5,000 cap)

Tax Year 2023

Additional tax credit for a percentage of contributions made during first 5 years for employers with 50 or fewer employees of up to $1,000 per employee (phased out for employers with 51 to 100 employees); excludes contributions to high income employees

Tax Year 2023

Saver’s Match Current Saver’s tax credit is replaced with a government funded matching contribution of 50% of the first $2,000 deposited to the IRA or retirement plan of certain low-income earners saving for retirement


Plan-Linked Emergency Savings Accounts Short-term after-tax savings of up to $2,500 for non-highly compensated employees that can be withdrawn monthly and if not used, moved into the plan’s designated Roth account for the employee


Retirement Savings Lost and Found Creates a searchable database for participants to find contact information on plans left behind and for plan sponsors to obtain contact information about lost participants

Within 2 years of Dec. 29, 2022

Unused 529 Can Roll to Roth IRA For 529 education savings plan balances that have been held for at least 15 years, up to $35,000 can be rolled into a Roth IRA; subject to Roth IRA limits



In total, there are 90 individual provisions in SECURE 2.0. Keep in mind that additional guidance will be required from government agencies – such as the IRS and the Department of Labor – before many of the items above can be put into practice. Over time, these changes should bring welcome news, whether you are saving for or living in retirement. Talk to your financial advisor today if you would like assistance with your investment journey.