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Your Intro to Secure Act 2.0

SECURE Act 2 - Impacts on individuals and businesses

You likely have seen headlines regarding the recently passed Omnibus bill, and the SECURE Act 2.0 passed within it. The original SECURE Act passed in 2019 with about a dozen changes that impact retirement planning laws and regulations. The newly passed SECURE Act 2.0 contains a slew of changes, some of which will impact you. Fortunately, your APCM Wealth Management for Individuals team has already spent hours becoming your local SECURE 2.0 experts and how it might impact you.

To avoid writing a novel, I’ve focused on areas with the most significant and widespread impact on individual and business-related planning.


  • Required Minimum Distributions (RMDs) starting age has been delayed to the year you turn 73. It pushes back again in 2033 to age 75. If you turned 72 on or before 12/31/2022, this law does not impact you, and your RMD is still required in 2023.

  • Roth Expansion: accessibility expansions (more below) and elimination of Roth RMDs in 2024 are among the changes to Roth IRA’s. Existing Roth strategies are unaffected.

  • 529s are eligible to be converted to Roth IRA’s starting in 2024 if the 529 has been maintained for 15 years. Contributions made to the 529 within the last five years are not eligible for conversion. You are limited to the annual IRA contribution limit, up to a lifetime maximum of $35,000 per Roth IRA owner.

  • Spousal Beneficiaries now have the option to continue the decedent’s IRA as the deceased spouse beginning in 2024. This election primarily benefits a surviving spouse who is older than the deceased spouse. RMDs in this account will be delayed until the deceased spouse would have turned their RMD age. This section gets technical quickly, and your team is ready to discuss how this may apply to you or someone you know.

  • Qualified Charitable Distribution (QCDs) limits will begin to increase with inflation beginning in 2024. In 2023 there is an opportunity to make a one-time QCD of $50,000 per taxpayer to a split-interest entity like a CRUT, CRAT, or CGA. The restrictions on income beneficiaries might limit planning benefits of this strategy.
  • IRA Catch-Up Contributions will begin to increase with inflation, in $100 increments beginning in 2024.

  • IRA Withdrawals: Normally, there is a 10% penalty for distributions from qualified accounts when taken prior to age 59.5. SECURE Act 2.0 has expanded exceptions to the 10% penalty to include:

    • Certain Professionals at Age 50: Private Sector Firefighters, State and Local Corrections Officers, and Workers with 25 or more years of service.Individuals with a Terminal Illness: Under previous law, a physician had to reasonably expect an illness or physical condition to result in death within 24 months to withdraw without the 10% penalty. That period has expanded to 84 months (7 years).
    • Exception For Victims of Domestic Abuse: Beginning in 2024, victims can withdraw $10,000 (indexed for inflation) or 50% of their vested balance, whichever is less. The withdrawal must be taken within one year after the abuse. The withdrawal can be paid back within three years.

  • Disabled First Responders receive substantial income tax benefits thanks to SECURE Act 2.0. Under current law, law enforcement officers, firefighters, paramedics, and EMTs can exclude disability pension or annuity payments from their income if it is related to their service. But, after they attain the normal professional retirement age, payments become taxable. This is addressed by introducing an “excludable amount” that allows individuals to continue the tax-favored status.

  • ABLE Accounts: Beginning in 2026, the age at  which an individual becomes disabled to qualify for an ABLE account expands from age 26 to 46.


  • SIMPLE Roth and SEP Roth IRAs are now an option for you and your employees. Even though the legal ability to contribute exists, it may be a while before custodians and plan administrators are ready to accept the Roth contributions.

  • SIMPLE IRA Contribution Increases: In 2024, employers can make additional non-elective contributions up to $5,000 or 10% of employee compensation, whichever is less.

    • Also, in 2024, employers with 50 or fewer employees will have deferral and catch-up contributions increase by 10%. Employers with 51 to 100 employees have the same increased deferral limits if they increase their matching contributions to 4% or their non-elective contributions to 3% (currently 3% and 2%).

  • Employer Roth Contributions can now be directed as Roth in 401(k)s and 403(b)s.Roth contributions from the employer will still be tax deductible for the employer. Any dollars from an employer to qualified Roth accounts are taxable income to the employees.

  • Increased Plan Catch-up Contributions: Beginning in 2025, retirement plan participants ages 60, 61, 62, and 63 have an increased catch-up contribution to the greater of $10,000 or 150% of the regular catch-up contribution amount indexed for inflation.

    • SIMPLE participants will have the same benefit except the greater of $5,000 or 150% of the regular SIMPLE catch-up contribution amount in 2025.

  • High Wage Earners: Employees with wagesmore than $145,000 (adjusted for inflation), and a participant in a 401(k), 403(b), or 457 must make their catch-up contributions as a Roth contribution.

    • It is not clear yet, but it seems this rule will not affect sole proprietors and partners.
    • If a plan sponsor does not offer a Roth option and they have a single employee with income over $145,000, then catch-up contributions will not be available to any plan participants.

  • Starter 401(k) will be a new plan option for small businesses in 2024. The new plan type will require auto-enrollment, only allow employee deferrals, and have the same deferral limits as an IRA.

  • Student Loans: Starting in 2024, employers can adopt a feature that treats student loan payments as an employee’s elective deferral, allowing the employee to receive employer match even if they can’t afford retirement plan contributions.

  • Start-up Credits: Employers with 50 or less employees can now receive a credit of up to 100% of a plan’s start-up costs (subject to existing limitations). They also can earn increased credits for employer contributions to defined contribution plans during the plan’s first four years.

  • Military Spouses who are offered plan participation immediately or within two months of hire will qualify the business for $500 credits for three years for each military spouse.

  • Auto Enrollment: most new 401(k) and 403(b) need to be designed to include auto-enrollment with an option for the employee to opt-out.

  • S-Corp ESOPs: In 2028, some S-Corp owners will be able to sell shares to an Employee Stock Ownership Program (ESOP) and defer up to 10% of their gain if they follow existing ESOP deferral rules.

In addition, here is a rapid-fire of law topics changed by SECURE Act 2.0: Savers Credit replaced by Savers Match, Qualified Longevity Annuity Contracts (QLACs), Expansion Of Eligible Investments For Variable Annuities And Variable Universal Life Policies, Income Annuities Held Within Qualified Accounts, Reduced penalties for retirement plan mistakes, SEPs for Household Employees, Retro-Deferral Rules, Qualified Disaster Distributions, Linked Emergency Savings accounts, and Relaxation of Certain 72(t) Rules.

SECURE Act 2.0 is long and complex, considering that these are just some highlights. Our local experts are ready to discuss how these changes may apply to you, or address any specific questions about the SECURE Act 2.0’s impact on your finances. 


Nic Cohen, CFP®
Financial Advisor





Commentary: The opinions expressed are those of Alaska Wealth Advisors Investment Team. The opinions referenced are as of the date of publication and are subject to change due to changes in the market or economic conditions and may not necessarily come to pass. Forward looking statements cannot be guaranteed.

Note: This material should not be construed as tax advice. You should always consult with your tax professional with regard to specific tax questions and obligations.

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