Towards the end of 2022, Congress passed a spending bill, known as the SECURE Act 2.0, that included several new provisions that impact retirement savings. Although some of these changes were aimed at companies, many of the most significant changes affect individuals (although not all of the changes take effect immediately). Below are some of the changes we at Plum Street Advisors feel are most likely to impact our individual clients, by year of implementation:


  • RMD Age: Effective immediately, the age at which individuals have to start taking required minimum distributions (RMDs) from their tax-deferred plans (IRA, 401k, 403b, etc.) increases from 72 to 73. If you didn’t have to take an RMD last year because you were under 72, you won’t have to take one this year either. If you are 72 or under this year, you’ll get an extra year before you must start withdrawing from your plan. In ten years, the RMD age will increase again to 75.
  • RMD Penalty: The penalty for not taking your RMD, or underestimating your RMD, used to be 50% of the amount you should have taken – an extreme penalty for what could easily be a simple mistake. Under the new law, the penalty has been reduced to 10% if you correct the error within two years (25% if it goes uncorrected longer than that).
  • Match Flexibility: Employers will be allowed to match employee contributions to qualified retirement plans on a pre-tax (traditional) or after-tax (Roth) basis – a boon for those individuals where a Roth is most appropriate.


  • 529s: The most exciting change coming in 2024 is that individuals can roll up to $35,000 from a 529 account into a Roth IRA in the name of the student beneficiary, as long as the 529 account has been in existence for at least 15 years. This really helps to alleviate some of the concern around overfunding a 529, because money will no longer become “stuck” in a 529 if it is not used for educational purposes (and potentially subject to 10% penalty). It will even create some planning opportunities for people who wish to purposely overfund a 529 as a way to save additional assets on a tax-deferred basis.
  • Catch-up Provisions: The allowable catch-up contribution to IRAs (currently an additional $1,000 above the regular $7,000 allowable contribution) will be increased by inflation going forward.
  • Catch-up Restrictions: On the negative side, individuals who earn over $145,000 will only be able to make catch-up contributions to Roth accounts (currently, you can choose whether you want to contribute to a Roth or a traditional account).


  • More Catch-up Provisions: The allowable catch-up contribution for 401k and similar plans (currently an additional $7,500 above the $22,500 normal limit for people 50 and over) will be increased by 50% for individuals aged 60-63.

The changes noted above are only the highlights of the bill. The list of changes is long and includes a number of additional exceptions that will allow early withdrawals from retirement accounts (i.e for domestic abuse survivors, payment of specific types of long-term care policies, survivors of federally declared disasters, and terminally ill account holders), as well as many other changes.

Each of these changes will be incorporated into our clients’ financial plans if they become applicable. In the meantime, please don’t hesitate to reach out to your advisor if you have any questions about your personal situation.