What Does the SECURE Act 2.0 Mean for You?

by Rev. Bill Gruenewald

Most people may not be aware that on December 29, 2022, the president signed into law a bill that included the SECURE Act 2.0 (Setting Every Community Up for Retirement Enhancement), expanding upon the original SECURE Act passed in 2019. The primary purpose of both of these legislations is to encourage businesses to offer a retirement plan to their employees and to encourage individuals to save more for their own retirement.

So how does that affect you personally?

There’s a lot to digest in this act, but the main points for most people as it relates to retirement and estate planning include:

The most important thing to know is that these provisions allow you to save more for retirement and expand your impact with your estate planning. 


For those interested in going a bit deeper on everything the act accomplishes, here are the key provisions:

  1. Increase Required Minimum Distributions (RMD) Age – Increase the beginning date for RMDs from age 72 to 73 starting in 2023 and age 75 in 2033.
  1. Increase Catch-Up Contributions Under a Retirement Plan or IRA – In 2023, the retirement plan catch-up contribution limit for those over 50 is $7,500. Starting in 2025, catch-up contributions for those ages 60 to 63 will be increased to the greater of $10,000 or 50% more than the regular catch-up contribution amount in 2024. Catch-up contributions will be indexed for inflation starting after 2025. IRA catch-up contribution for an individual who attains age 50 will be indexed for inflation starting in 2024.
  1. Expand Roth Contributions – Roth contributions are now allowed for SIMPLE and SEP IRAs. Employer contributions and employee elective deferrals (if permitted) can be designated as Roth.
  1. Roth Catch-Up Contributions – For those with incomes exceeding $145,000, catch-up contributions will be designated as Roth contributions.
  1. Eliminate RMDs for Roth 401(k) Accounts – Starting in 2024, required distributions will no longer need to be taken from Roth 401(k) accounts. 
  1. 529 Plan Rollovers to Roth IRAs – Starting in 2024, beneficiaries of 529 plans may roll over up to $35,000 during their lifetime to a Roth IRA. The rollovers will be subject to annual contribution limits and the 529 plan must have been open for more than 15 years.
  2. Expand 401(k) Automatic Enrollment – Starting in 2025, 401(k) and 403(b) plan participants are automatically enrolled in the plan once they are eligible to participate. Some details are:  
    • Initial contribution of at least 3% of their salary.
    • Each year contributions would increase by 1% until a goal of 10% is reached, but not more than 15%.
  1. Emergency Savings Account – Beginning in 2024, employers can establish an emergency savings account where employees can save up to $2,500 in a Roth-style account. Distributions will be treated like a qualified distribution from a Roth account (tax-free if requirements are met). 
  1. Exemption from 10% Early Distribution Penalty for Withdrawals for Certain Emergency Expenses – In case of financial hardship, up to $1,000 may be withdrawn per year, penalty-free, from a 401(k) or IRA. The employee has the option to repay the distribution within three years. No further distributions will be permitted during the repayment period unless the distribution is paid in full.
  1. Modify the Saver’s Credit – To encourage those with low and moderate incomes, an eligible individual who makes a qualified retirement savings contribution shall be allowed a matching contribution. Starting in 2027, the government will provide 50% credit on savings up to $2,000 ($1,000 maximum credit). Credit is available regardless of whether the taxpayer has an income tax liability. 
  1. Student-Loan Matching Program – Student loan payments will be treated as Employee Elective Deferral for purposes of matching contributions.
  1. Increase Qualified Longevity Annuity Contract (QLAC) Contributions – Up to $200,000 can be contributed into a qualified longevity annuity contract. The prior 25% of the income limit is eliminated.
  1. Reduce RMD Excise Tax – Reduced excise tax for failure to take required distributions from 50% to 25%.
  1. Expand Qualified Charitable Distributions (QCD) – The QCD rules are expanded to allow for a one-time $50,000 distribution to a charity through a split-interest entity, including charitable gift annuities, charitable remainder unitrusts (CRUT), and charitable remainder annuity trusts (CRAT). Beginning in 2024, the $100,000.00 annual limit on QCDs will be indexed for inflation. 
  1. Annuities in 401(k) Plans – Removal of barriers to the use of annuities in qualified plans by exempting certain annuity features from actuarial tests that would otherwise prohibit their use.
  1. Retirement Savings Lost and Found – The Labor Department will create a national online searchable lost and found database. This database will help individuals locate retirement savings they might have trouble otherwise locating.

Taking advantage of these provisions can allow you to save more for retirement and make an even greater impact with your estate for Kingdom purposes. We know thinking about estate planning can be overwhelming at times, but it doesn’t have to be. 

The Tennessee Baptist Foundation is able to guide you as you plan your estate so you are making decisions that reflect your faith and further the Kingdom of God even beyond your lifetime. Give us a call today or fill out our brief contact form at any time to learn more. We’d love to help you leave a legacy that makes a difference.


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You can reach us via phone at (615) 371-2029 or fill out this form.

Please note that the advice offered in this article is not intended to be construed as tax, legal or accounting advice. This material has been prepared for general informational purposes only and is not intended to provide, and should not be relied on for, tax, legal or accounting advice for the reader. You should consult your own tax, legal and accounting advisors before engaging in any transaction.