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New Retirement Rules for 2024

SECURE Act 2.0 Update


  • Some enhancements to retirement plans should encourage more people to save.

  • New 529 Plan rollover capabilities but will be subject to several requirements.

  • RMD updates for Roth balances in employer plans.

  • Special catch-up contribution provision postponed.


We're officially one year into The SECURE Act 2.0 becoming law.

SECURE stands for Setting Every Community Up for Retirement Enhancement.

While 1.0 only introduced about 10 provisions, each one was pretty meaningful. With about 90 provisions, SECURE 2.0 is much larger in scope but only a few of the provisions carry much weight.

While most of the changes are focused on giving retirees and retirement plans more flexibility, there are other changes meant to help younger people prepare for retirement while managing student loan debt.

Here are the rules taking effect in 2024.

People years away from retirement.

1. Emergency savings

Retirement plans can offer a short-term emergency savings account (ESA) for non-highly compensated employees as part of a defined contribution plan (ex. 401(k) Plan).

It will be a Roth (after-tax) account limited to $2,500 in annual contributions and participants may be automatically enrolled at a rate of up to 3% of compensation. The first 4 withdrawals in a year are tax and penalty-free and employers also have the option of making a matching contribution.

💡 Context: This provision has good intentions, but a high-yield savings account, currently paying 4.5%+, would be a much better home for emergency savings. In addition to the high interest rate, there are no contribution limits, and you never have to worry about taxes or penalties.

2. Student Loans

Starting this year, employers can “match” employee student loan payments with matching payments to their retirement accounts. Employers can match contributions to elective deferrals and student loan payments but not in excess of the total matching contributions available in the plan.

With many people saddled with student loan debt, this change will allow employees to continue focusing on paying down their student loans, while also saving for retirement.

3. 529 Plans

The biggest concern with 529 Plans has been the risk of overcontributing. If you wanted to access unused funds in a 529 college savings account, you had to take a nonqualified withdrawal which meant paying taxes on earnings and a 10% penalty.

As of this year, 529 plan assets can now be rolled over to a Roth IRA subject to:

1) The 529 plan being in place at least 15 years,

2) Assets going to the same beneficiary,

3) Beneficiary having earned income,

4) Annual Roth contribution limits, and

5) Aggregate lifetime limit of $35,000.

Regardless of the many requirements to this provision, this is a great savings opportunity for those that have long-standing, unused 529 Plans in place.

💡TIP: Open a 529 Plan and fund it with $25 to just get the clock started.

People near or in retirement

1. BIG changes to RMDs

Big changes to required minimum distributions (RMDs) started last year. The age for starting RMDs was increased to 73, and that age will get bumped up again to 75 in 2033.

Penalties for failing to take an RMD were also reduced to 25%; 10% if the RMD was later satisfied and a corrected tax return is submitted in time.

Starting in 2024, Roth balances in employer retirement plans will no longer be subject to RMD requirements.

2. Special catch-up contribution

IRAs: Starting in 2024, the current $1,000 catch-up contribution if age 50 and older will be indexed for inflation in $100 increments. This is the same indexing that's used for regular IRA contributions.

Employer Plans: This is one provision that was supposed to take effect in 2024 but has been postponed. Starting in 2026, all catch-up contributions at age 50 or older must be Roth (after-tax) contributions. However, if you earned $145,000 or less during the prior calendar year, you are exempt from that requirement.

Sneak peek: Starting in 2025, certain individuals ages 60 through 63 years old can make catch-up contributions up to $10,000, indexed for inflation. This would be in place of the current catch-up contribution of $7,500.


While SECURE 2.0 provides increased opportunities to save for retirement, everyone's financial situation is different. Be sure to account for these changes as they take effect and evolve your financial plan as needed, so that you continue to make the most of all opportunities.

Katie Blechschmidt, CFP®

Director of Client Success


Want to see how these new provisions impact you?

Click here to schedule a free, 30-minute consultation to learn how we can help.


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