SECURE Act 2.0 changes coming in 2024 and beyond

Will the new legislation affect you? 

Article published: September 18, 2023

In this article:


  • Workers making student loan payments in 2024 may get an offsetting contribution from their employer
  • Leftover 529 balances can be used to contribute to the beneficiary’s retirement
  • Qualified Charitable Distribution amounts and IRA catch-up amounts will be indexed for inflation
  • Starting in 2026, catch-up 401(k) contributions must be made into a Roth account for high earners over 50 – this is a delay from the original legislation
  • This could potentially increase your taxable income amount

The SECURE Act 2.0 was made law in December 2022, ushering in a host of changes to the retirement savings landscape, to be phased in over several years. Starting in 2023, we saw significant changes in the rules around Required Minimum Distributions, for example. And effective in 2024, we’ll see more changes being enacted. What are they and how might they impact you? Here are the main points to know:

Employer matching contribution for student loan payments

Starting in 2024, employers will be able to make matching contributions to retirement accounts that match employee student loan payments, even if the employee isn’t making their own contributions into the 401(k) plan. This will make it easier to save for retirement while paying off school loans, especially for young workers trying to pay off student loan debt.

529 plans

SECURE 2.0 provides more options for anyone who has been saving into a 529 plan and finds themselves with unused funds. Starting in 2024, you can use those leftover balances to contribute to the beneficiary’s retirement in the form of a Roth IRA. The 529 must have been open at least 15 years and there is a lifetime maximum contribution of $35,000 from a 529 plan account to a Roth IRA. These 529 transfers are also subject to the usual annual Roth contribution limits.

The SECURE Act 2.0 was designed to help Americans save more for retirement. But everyone’s financial circumstances are different, so it’s important to be aware – some of these changes could come with a catch. 

Changes to catch-up contributions

Starting in 2026, there is an “income look-back” provision for 401(k) catch-up contributions. If you are over age 50, you can contribute an additional “catch-up” amount into your 401(k) plan. However, if you earn more than $145,000 in the prior year (indexed for inflation each year), your catch-up contributions must now go into the Roth component of your company plan.

This change was scheduled to take effect in 2024, however, the IRS recently extended the implementation window to 2026 to give 401(k) providers more time to administer these changes.

When it does take effect, because these are Roth contributions (after-tax), these catch-up contributions will no longer be tax deductible from your current year's annual income.

Therefore, this new rule could mean you pay more in income taxes, so it’s worth talking to your tax professional and financial planner in advance of the implementation to discuss strategies.

There will also be a change for those 50 and older to the IRA catch-up contribution, which is currently $1,000. Starting in 2024, the catch-up limit will be indexed for inflation, meaning it could increase every year, depending on the federal cost-of-living adjustment. Qualified Charitable Donation amounts will also be indexed for inflation.

Be sure to talk to your tax professional and financial planner about how these changes will impact your unique situation, needs and goals.

Neither Edelman Financial Engines nor its affiliates offer tax or legal advice. Interested parties are strongly encouraged to seek advice from your qualified tax and/or legal professionals to help determine the best options for your particular circumstances.

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