Year-End Financial To-Do: 2024 Brings New Retirement Savings Opportunities for Individuals and Business Owners

Dec 19, 2023

By Edward “Ed” V. O’Neal, Senior Vice President and Manager, Retirement Plans
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As we all look to close out 2023 and move into the new year, individuals seeking to increase their retirement savings or business owners interested in establishing a retirement plan in 2024 will have much to consider. The past few years have seen some of the most significant and impactful retirement legislation in more than a decade. In particular, the Setting Every Community Up for Retirement Enhancement (SECURE) Act I (enacted in 2019), and the recently enacted SECURE Act II, introduced new retirement provisions focused on expanding retirement plan coverage for employees, enhancing retirement savings and providing employees more ability to access retirement savings, if needed.

Although several key provisions in the recent retirement legislation are already effective, including a new starting age for required minimum distributions (RMDs) at age 73 and the creation of tax credits to encourage startup retirement plans for small business owners, many of the provisions introduced in the legislation are scheduled to become effective in 2024. Both SECURE Act I and SECURE Act II were expansive in scale, with provisions impacting individuals and plan sponsors. Highlighted below are just a few of the provisions to be mindful of that will become effective in 2024:


  • RMDs will no longer apply to Roth 401(k), Roth 403(b) or Roth 457(b) accounts beginning in 2024. This had been a major difference between how these Roth accounts were treated vs. Roth IRAs (which have always been exempt from RMDs). Now all Roth accounts will be treated similarly for RMD purposes.
  • Plan participants that have experienced domestic abuse will be able to withdraw the lesser of $10,000 (indexed for inflation) or 50% of the participant’s retirement account. These distributions are not subject to the 10% early withdrawal penalty, and participants have up to three years to repay the withdrawal if they choose.
  • Excess funds in 529 education savings accounts can be rolled over to a Roth IRA. There are several restrictions that must be followed to take advantage of this provision, including:
    • The 529 account must be maintained for at least 15 years before moving any assets to a Roth IRA
    • No contributions or earnings to the 529 account in the previous five years can be used as part of the Roth IRA
    • There is a lifetime maximum limit of $35,000, but annually no more than the Roth IRA contribution amount can be rolled ($7,000 for 2024).

Retirement Plan Sponsors

  • An increase in SIMPLE IRAs contributions for both employee salary deferral limits (increased by 110% of the 2024 cost-of-living adjusted amount), as well as additional voluntary non-elective employer contributions. The additional non-elective employer contribution would be above and beyond the mandatory matching or non-elective SIMPLE contribution and would be limited to the lesser of 10% of compensation or $5,000 per participant. 
  • The introduction of a new provision permitting employers to make matching contributions to plan participants based on the participant’s qualified student loan payments. The retirement plan could rely on employee certification of the student loan payment, and this provision would be available for a 401(k), 403(b), governmental 457(b) and SIMPLE IRA plans. 
  • The creation of an emergency savings account within a retirement plan to allow plan participants access to a portion of their retirement savings in the event of an unforeseen emergency. This emergency account would be established as a Roth account, with contributions funded solely through salary deferrals and capped at $2,500. This feature is available for 401(k), 403(b), governmental 457(b) and SIMPLE IRA plans.

While there is still more clarification and guidance needed from the Department of Labor and Department of Treasury regarding some provisions in the recent retirement legislation, it’s clear that 2024 will bring with it new opportunities for individuals and retirement plan sponsors to reap the benefits. Be sure to consult with your legal and tax advisor to review the impact to your personal and business tax situation before utilizing any of these provisions.


IMPORTANT DISCLOSURES: The information provided is based on internal and external sources that are considered reliable; however, the accuracy of this information is not guaranteed. This piece is intended to provide accurate information regarding the subject matter discussed. It is made available with the understanding that Benjamin F. Edwards is not engaged in rendering legal, accounting or tax preparation services. Specific questions on taxes or legal matters as they relate to your individual situation should be directed to your tax or legal professional.