What Is the SECURE Act 2.0?

The SECURE Act 2.0 is a law designed to help Americans save more for retirement. Signed into law in 2022, the SECURE 2.0 Act (Setting Every Community Up for Retirement Enhancement), includes provisions for automatic enrollment in workplace retirement plans like 401(k)s, higher catch-up contributions for older workers, greater flexibility for withdrawing retirement funds without penalty, and expanded access for part-time employees.

SECURE 2.0 builds on the original SECURE Act of 2019, introducing dozens of provisions aimed at strengthening retirement savings. Here’s what to know about SECURE 2.0 and how it may help you build your nest egg.

What Changed Under the SECURE Act 2.0?

The SECURE 2.0 Act introduced numerous updates that make it easier for more workers to save for retirement by expanding access to plans and increasing saving opportunities. Here are some of the most significant changes:

Required Minimum Distribution (RMD) Changes

Under the SECURE Act 2.0, retirement savers with tax-deferred retirement accounts — such as traditional 401(k)s and IRAs — now have more time for their savings to grow before mandatory withdrawals begin.

Effective January 1, 2023, the age for required minimum distributions (RMDs) increased from 72 to 73. This change applies to individuals who turned 72 in 2023 or later, giving them an additional year before they must begin withdrawals. Looking further ahead, the RMD age is scheduled to increase again to 75 starting in 2033.

SECURE 2.0 also significantly reduced penalties for missed RMDs. As of 2023, the penalty dropped from 50% to 25% of the amount not withdrawn. If corrected within two years, the penalty may be further reduced to 10%.

Expanded Catch-Up Contributions

Workers nearing retirement age now have more opportunities to boost their savings. As of 2025, individuals ages 60 to 63 with eligible retirement plans — such as 401(ks), 403(bs), and 457(b)s — can make enhanced (“super”) catch-up contributions of $11,250 in 2025 and 2026. That’s instead of the standard catch-up contribution for those ages 50 and older ($7,500 in 2025 and $8,000 in 2026).

Another provision, effective in 2026, requires individuals earning more than $150,000 in FICA wages in previous year to make all catch-up contributions on a Roth basis. This means contributions are made with after-tax dollars, allowing tax-free withdrawals in retirement.

Automatic Enrollment Requirements

As of January 1 2025, 401(k) and 403(b) plans established on or after December 29, 2022 must automatically enroll eligible employees. This mandate applies to both new hires and existing employees who have not yet enrolled, although individuals may opt out.

These requirements do not apply to businesses that are less than three years old or have fewer than 10 employees.

Initial contribution rates must fall between 3% and 10% of the employee’s salary and automatically increase each year until reaching at least 10% (and up to 15%). Employees can adjust their contribution rate at any time.

Previously, employees had to opt in manually, which led to lower participation rates. According to the March 2025 National Compensation Survey, 20% of workers with plan access did not participate, missing out on both personal savings and potential employer matching. Research consistently shows that automatic enrollment significantly boosts participation rates.

Saver’s Match (Replacing the Saver’s Credit)

Starting in 2027, the Saver’s Credit will be replaced with a new Saver’s Match program. The current Saver’s Credit is a nonrefundable tax credit for eligible low- and moderate-income individuals who contribute to a retirement account. It reduces the amount of taxes owed.

Under the new Saver’s Match, eligible individuals will receive a federal matching contribution equal to 50% of the first $2,000 they contribute annually. This match will be deposited directly into their retirement account rather than provided as a tax credit.

Emergency Savings & Withdrawal Flexibility

Generally, a 10% penalty applies to individuals who withdraw money from a 401(k) or IRA before age 59 ½, though some exceptions exist.

SECURE 2.0 introduced a new exception for “emergency personal expenses” to address immediate financial needs. Eligible individuals may now make one withdrawal of up to $1,000 per year without the 10% penalty, though the amount remains subject to ordinary income tax. If the amount is not repaid, additional withdrawals may be limited during a three-year period.

In addition, as of 2024, employers may offer emergency savings accounts linked to 401(k) plans for non-highly compensated employees. These accounts allow participants to save for unexpected express and access funds regularly without penalty. For 2026, contributions are capped at $2,600. Employer matching contributions, if offered, are deposited into the retirement account — not the emergency savings account.

Expanded Access for Part-Time Workers

As of January 1, 2025, long-term part-time workers can join their workplace retirement plan sooner. Under SECURE 2.0, the eligibility requirement has dropped from three to two consecutive years of service. Employees who work at least 500 hours per year during that period are now eligible to participate in their employer’s 401(k) or 403(b) plan.

How the SECURE Act 2.0 Impacts Retirement Savers

SECURE 2.0 includes a number of provisions that may help individuals save more effectively — and potentially make their retirement savings last longer.

Older Savers Can Contribute More

Super catch-up contributions allow individuals ages 60 to 63 to contribute up to $11,250 in 2025 and 2026. This raises the total 401(k) contribution limit to $34,750 in 2025 and $35,750 in 2026.

Keep in mind that as of 2026, individuals earning more than $150,000 in FICA wages must make all catch-up contributions into a Roth 401(k) account.

Higher Participation Through Auto-Enrollment

Automatic enrollment is expected to significantly increase participation in workplace retirement plans.

Plans with auto-enrollment tend to have higher participation rates than those requiring manual enrollment. In addition, automatic annual increases (auto escalation) help participants steadily grow their savings over time — often resulting in 20% to 30% higher savings after three years compared to plans without escalation.

More Flexibility in Managing Retirement Accounts

SECURE 2.0 provides greater flexibility for managing retirement savings. For instance, individuals can now make one penalty-free emergency withdrawal of up to $1,000 per year. Employers may also offer linked emergency savings accounts, allowing employees to save up to $2,600 (in 2026) and make multiple withdrawals annually without penalties.

In addition, delaying RMDs from age 72 to 73 allows more time for tax-deferred growth.

Tax Planning Implications

SECURE 2.0 introduces several tax-related considerations.

Potential tax advantages:

Potential drawbacks:

When Do These Changes Take Effect?

The changes introduced by SECURE 2.0 take effect at different times over several years. The chart below provides an easy way to keep track of the changes and their starting dates.

SECURE Act 2.0 vs. the Original SECURE Act

The original SECURE Act, passed in 2019, focused on expanding retirement access and removing barriers to savings. SECURE 2.0 builds on that foundation by further increasing contribution limits, expanding access, adding flexibility for withdrawals, and encouraging participation through automatic enrollment.

Here’s a quick comparison of the two laws:

Notably, the original SECURE Act also made it easier and more affordable for small businesses to offer retirement plans to employees. In addition, it allowed individuals to contribute to a traditional IRA after age 70 ½, which was previously the age cap.

The Takeaway

The SECURE Act 2.0 is designed to make saving for retirement easier and more accessible. By expanding access to workplace plans, increasing contribution opportunities, and providing more flexibility, the law aims to help individuals build a stronger financial future.

If you don’t have access to a workplace plan, opening an IRA online may be another way to save for retirement. Even individuals with employer-sponsored plans can consider adding an IRA to potentially boost their overall savings.

Prepare for your retirement with an individual retirement account (IRA). It’s easy to get started when you open a traditional or Roth IRA with SoFi. Whether you prefer a hands-on self-directed IRA through SoFi Securities or an automated robo IRA with SoFi Wealth, you can build a portfolio to help support your long-term goals while gaining access to tax-advantaged savings strategies.

FAQ

When did SECURE 2.0 take effect?

SECURE 2.0 was signed into law in late 2022, and the first of its provisions (raising the age for RMDs) took effect in January 2023. Many of the other key provisions went into effect in 2024, 2025, and 2026, and some are slated for future years. For example, the Saver’s Match program goes into effect in 2027, and increasing the age for RMDs from 73 to 75 is scheduled for 2033.

Does SECURE 2.0 require Roth catch-ups?

In some cases, yes. Under the SECURE 2.0 Act, employees who earned more than $150,000 in FICA wages in 2025 must make catch-up contributions on a Roth (after-tax) basis. As a result, the employee will pay taxes on the contributions up front and withdraw them tax-free in retirement.

If an employer does not offer a Roth option for their workplace retirement plan, higher-earning employees cannot make catch-up contributions.

Do all employers have to comply with SECURE 2.0?

Not all employers have to comply with all provisions of SECURE 2.0. Although many of the Act’s provisions do apply broadly, there are certain exemptions, including those for small businesses with 10 or fewer employees, new businesses, and businesses that implemented workplace retirement plans in 2022 or earlier. For example, employers with workplace retirement plans established before December 29, 2022 are not required to follow the new rules for automatically enrolling eligible employees.

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