SECURE Act
As of 4/1/2026
Setting Every Community Up for Retirement Enhancement (SECURE) Act
What is it?
The SECURE 2.0 Act of 2022 (“SECURE 2.0”) was signed into law on December 29, 2022, as part of a year-end federal spending bill. SECURE 2.0 builds on the original SECURE Act of 2019 by expanding access to retirement plans and savings, improving administrative efficiency, enhancing retirement income options, and providing additional participant flexibility.
SECURE 2.0 includes numerous provisions with staggered effective dates. Many provisions are now in effect (2023–2025), with additional changes becoming effective in 2026 and beyond.
What do I need to do?
Be prepared to discuss the following topics with your clients, including which provisions are already effective and which are optional and require plan amendments.
Below are select highlights of SECURE 2.0, organized by topic and effective date.
Distribution flexibility and participant access
Effective January 1, 2024 (currently in effect)
Plans may permit one penalty-free emergency withdrawal of up to $1,000 per year. Repayment is permitted within three years. No additional emergency withdrawals are allowed during the three-year repayment period unless the prior distribution is repaid.
- 10% early withdrawal penalty under IRC §72(t) does not apply
- Applies to 401(k), 403(b), and governmental 457(b) plans
Effective January 1, 2024 (currently in effect)
Plans may permit distributions for domestic abuse victims of up to the lesser of $10,000 (indexed) or 50% of the account balance, without the 10% early withdrawal penalty. Repayment is permitted within three years, and plans may allow self-certification.
- Applies to 401(k), 403(b), and governmental 457(b) plans
Effective December 29, 2022 (currently in effect)
Individuals with a terminal illness may take penalty-free distributions. A terminal illness is defined as one certified by a physician as reasonably expected to result in death within 84 months.
- Applies broadly to retirement plans subject to early withdrawal penalties
Effective for disasters occurring on or after December 27, 2020 (permanent)
SECURE 2.0 permanently extends relief for qualified disaster recovery distributions:
Key conditions include:
- Principal residence in a federally declared disaster area
- Distribution limit of $22,000
- Economic loss attributable to the disaster
Tax treatment:
- 10% early withdrawal penalty does not apply
- Income may be spread over three years
- Repayment permitted within three years
Loan relief:
- Loan limit increased to $100,000 or 100% of vested balance
- Repayment periods extended for existing loans
- Applies to 401(k), 403(b), and governmental 457(b) plans
Effective January 1, 2026 (now in effect this year)
Plans may permit penalty-free distributions of up to $2,500 per year to pay premiums for high-quality long-term care insurance.
- Applies to 401(k), 403(b), and governmental 457(b) plans
Effective December 29, 2022 (currently in effect)
The repayment period for qualified birth or adoption distributions is reduced to three years, aligning with the statute of limitations for tax refunds.
- Applies to 401(k), 403(b), and governmental 457(b) plans
- RMD age increased (from prior law) and penalties for missed RMDs reduced
- Applies across qualified plans and IRAs
Automatic enrollment and savings enhancements
Effective for plan years beginning after December 31, 2024
Most new 401(k) and 403(b) plans must include automatic enrollment (with exceptions for small and new businesses).
Effective for plan years beginning January 1, 2024 (currently in effect)
Employers may offer emergency savings accounts within retirement plans for non-highly compensated employees:
- Automatic enrollment up to 3% of pay
- Account balance capped at $2,500
- Roth-style contributions
- Treated as elective deferrals for matching purposes
Plans may treat qualified student loan payments as elective deferrals for purposes of employer matching contributions.
- Effective for plan years beginning after December 31, 2023 (currently in effect)
Roth and contribution enhancements
Effective December 29, 2022 (currently in effect)
Employer matching and nonelective contributions may be made on a Roth basis (subject to income inclusion).
Effective January 1, 2023 (currently in effect)
SIMPLE IRAs and SEPs may permit Roth contributions.
SECURE 2.0 includes changes to catch-up contribution rules, including age-based enhancements and Roth requirements, some of which take effect in 2025 and later years.
Employer and plan structure provisions
Effective January 1, 2023 (currently in effect)
- Startup credit increased to 100% for employers with up to 50 employees
- New credits available for employer contributions
- Credits available to PEP and MEP adopters
Effective January 1, 2023 (currently in effect)
- PEPs may designate a fiduciary (other than an adopting employer) to collect contributions, subject to written procedures
Effective January 1, 2023 (currently in effect)
403(b) plans may participate in PEPs and MEPs.
Effective January 1, 2024 (currently in effect)
The automatic IRA rollover threshold increased from $5,000 to $7,000.
Effective for plan years beginning January 1, 2025
Eligibility shortened from three years to two consecutive years with at least 500 hours of service.