SECURE 2.0 Act
A 2022 federal law amending retirement account rules, including RMD age changes, expanded catch-up contributions, automatic 401(k) enrollment, and new employer matching for student loan payments.
Detailed Explanation
Key SECURE 2.0 provisions: RMD start age raised to 73 (75 for those born in 1960+), reduced RMD penalty (25 percent, or 10 percent if timely corrected), elimination of Roth 401(k) RMDs, employer Roth matching contributions, expanded automatic enrollment, employer matching tied to student loan repayments, and the new $5,000 emergency savings account inside a 401(k). The Act is rolled out over multiple years, with most provisions effective 2024-2026. Significantly affects retirement, tax, and estate planning.
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Learn about Tax Planning & StrategyRelated Terms
Required Minimum Distribution (RMD)
The annual minimum amount that must be withdrawn from most retirement accounts after a specified age, taxed as ordinary income.
Solo 401(k)
A retirement plan for self-employed individuals and small business owners with no full-time employees, allowing both employee deferral and employer profit-sharing contributions.
SEP-IRA
A simplified employee pension IRA allowing self-employed individuals and small business owners to contribute up to 25 percent of net earnings to a traditional IRA structure.
Backdoor Roth IRA
A two-step strategy of contributing to a non-deductible traditional IRA and converting it to Roth, used by high-income earners who exceed direct Roth IRA contribution limits.
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