How SECURE 2.0 and New Retirement Rules Affect Your 401(k)

Introduction

Retirement planning rules don’t change often — but when they do, the impact can be significant. The SECURE 2.0 Act, passed as an expansion of earlier retirement legislation, continues rolling out changes through 2025 and beyond. These updates affect 401(k) plans, IRAs, employers, and individual savers, especially those nearing retirement.

Understanding how these new rules work — and how to use them strategically — can help you keep more of your money, avoid surprises, and build a more resilient retirement plan.

Below is a clear breakdown of what’s changing and what it may mean for you.

What Is SECURE 2.0?

SECURE 2.0 is a wide-ranging update to U.S. retirement policy designed to:

• Encourage more Americans to save
• Increase participation in workplace plans
• Modernize outdated rules
• Provide flexibility for retirees
• Expand tax-advantaged opportunities

Rather than one single change, it introduced dozens of provisions rolling out gradually between 2023 and 2027.

Key SECURE 2.0 Changes That Affect Your 401(k)

1. Automatic Enrollment Is Becoming the Default

One of the most impactful changes is mandatory auto-enrollment for many new employer retirement plans.

Key highlights:

• New 401(k) and 403(b) plans must automatically enroll eligible employees
• Default contribution rate typically starts at 3%
• Contributions automatically increase annually (up to at least 10%)
• Employees can opt out, but participation is the default

Why this matters:
Auto-enrollment dramatically increases retirement participation and long-term savings — especially for younger workers who might otherwise delay saving.

2. Higher Catch-Up Contributions for Ages 60–63

Beginning in 2025, individuals aged 60–63 will be able to make larger catch-up contributions to employer retirement plans.

This creates a powerful planning window for people approaching retirement who want to accelerate savings during their highest earning years.

Why this matters:
Your early 60s are often peak-income years. Strategic contributions during this window can meaningfully boost retirement readiness.

3. Roth Treatment for High Earners (Starting 2026)

Another major update affects how catch-up contributions are taxed.

Starting in 2026, employees earning above a certain income threshold must make catch-up contributions on a Roth (after-tax) basis, rather than pre-tax.

What this means:

• Higher earners may lose the tax deduction today
• But gain tax-free withdrawals later
• Tax diversification becomes more important than ever

This change makes proactive tax planning essential, especially for professionals and business owners.

4. Required Minimum Distribution (RMD) Age Changes

SECURE 2.0 continues to push back when retirees must start taking RMDs.

Current trajectory:

• RMD age is now 73
• Will increase to 75 in 2033

Why this matters:
Delaying RMDs allows:

• More time for tax-deferred growth
• Greater flexibility in withdrawal strategies
• More opportunities for Roth conversions

However, delaying without a coordinated tax plan can still create future tax problems.

5. Employer Matching on Student Loan Payments

Employers may now offer matching retirement contributions tied to student loan payments.

This allows younger workers to:

• Pay down debt
• Still receive employer retirement matches
• Avoid delaying long-term savings

This change can be especially valuable for professionals early in their careers.

What These Changes Mean for Your Retirement Strategy

SECURE 2.0 creates more opportunity — but also more complexity.

To take full advantage, your plan should consider:

• Contribution strategy across pre-tax, Roth, and taxable accounts
• Timing of Social Security and RMDs
• Tax-efficient withdrawals
• Employer plan features
• Long-term income sustainability

A one-size-fits-all approach no longer works.

Final Thoughts: Planning Matters More Than Ever

The retirement landscape in 2025–2026 is more flexible, but also more complex. New rules create opportunities — but only if they’re coordinated intentionally.

A written financial plan can help align:

• Your retirement income
• Taxes
• Investments
• Long-term goals

If you want help understanding how these changes apply to your personal situation, working with a fiduciary advisor can help bring clarity and confidence to your next steps.