The Setting Every Community Up for Retirement Enhancement (SECURE) Act of 2019 and SECURE 2.0 (2022) made the most significant changes to US retirement rules in decades. Many existing strategies stopped working; new ones became available.
This page covers the changes and the planning implications.
Previously: 70.5. After SECURE Act: 72.
Provides more years of tax-deferred growth before forced distributions.
Previously: non-spouse beneficiaries could distribute inherited IRA over their lifetime, "stretching" tax deferral over decades.
After SECURE Act: non-spouse beneficiaries must distribute the entire inherited IRA within 10 years.
Exceptions ("eligible designated beneficiaries"):
For most non-spouse heirs (typically adult children), 10-year payout is the rule.
For someone turning 72 in 2025: RMD at 73 (in 2026).
For someone turning 72 in 2034: RMD at 75 (in 2037).
Provides additional years of deferral.
Increased catch-up contributions for ages 60-63 (super catch-up):
For workers in these specific ages, dramatic contribution increases possible.
Catch-up contributions (50+) for high earners ($145K+ in 2024 dollars) must be Roth, not traditional. Phased in.
Reduces traditional contribution flexibility for high earners but increases Roth balances.
Up to $35K of unused 529 balance can be rolled to a Roth IRA in the beneficiary's name. Subject to:
Major change: significantly reduces 529 over-funding risk.
See FiveTwentyNinePlansAndEducationSavings.
Roth 401(k) accounts no longer have RMDs (they didn't make sense; Roth IRAs already didn't have them).
For retirees with Roth 401(k) balances: can leave them growing without forced distributions.
New employer plans (post-2025) must auto-enroll employees. Higher participation rates expected.
Up to $2,500 in retirement plans can be designated as emergency savings (special "side car" account). Penalty-free access.
Employers can match employee student loan payments as if they were 401(k) contributions. Doesn't help all employees but provides coordination.
Adult children inheriting traditional IRAs face 10-year tax compression. Strategies:
For retirees expecting to leave substantial traditional balances, the math has shifted toward Roth conversion.
With RMD pushed to 73-75, the "low-tax window" (between retirement and RMDs) is longer. Roth conversion ladder during this window is more valuable.
For workers 60-63 (super catch-up): use them. Significantly more retirement saving capacity.
For high earners (50+ catch-up): must be Roth. Plan tax accordingly.
10-year compressed distribution. Strategies:
Concerns about over-funding largely resolved. Reasonable to fund 529 more aggressively knowing the Roth-rollover safety net exists.
Bigger reasons to consider Roth strategies. Inherited Roth doesn't have the 10-year tax pressure (heirs still must distribute within 10 years but the distribution is tax-free).
Retiree converts traditional → Roth in low-tax retirement years. By RMD age, traditional balance is smaller; RMDs lower; tax-free Roth grows for heirs.
Particularly valuable given 10-year inheritance rule.
For charitably inclined retirees with large traditional balances: Qualified Charitable Distributions (QCDs) to charity reduce balance + provide tax-free transfer.
After death, remaining traditional IRA can name charity as beneficiary (tax-free for charity; the beneficiaries who would face 10-year compression are skipped).
For high earners with willing employers: contributions to after-tax 401(k) → in-plan Roth conversion. Massive Roth contributions beyond standard limits.
The SECURE changes have made tax diversification (traditional + Roth + taxable) more valuable. Plans heavy in traditional are at higher risk of compressed inheritance taxation.
Strategies built around stretch IRA no longer work. Update plans.
For wealthy retirees, traditional IRA inheritance compression can mean heirs in higher brackets paying significant tax.
Roth conversion in low-tax retirement years addresses this.
Workers 60-63 not aware of the larger contribution limits.
The Roth rollover provision changes the calculus. Funding can be more aggressive.
For new plans: employees auto-enrolled. Some opt out. Default for most: stay in.
The SECURE Act trajectory continues. Each Congress could add more changes:
Planning should be flexible enough to adapt.
For retirees and pre-retirees: