SECURE 2.0 Act and Your Retirement Plan

We're committed to helping you understand your retirement plan under this new legislation.

On December 29, 2022, the SECURE 2.0 Act was signed into law, expanding the landscape of retirement savings with incentives for employers and employees alike.

This legislation unveils new avenues to strengthen retirement preparedness while also building upon existing retirement savings measures. While some of these provisions are effective now, many of the changes will take place over the course of the next three years.

At GuideStone®, we are committed to helping build financial security and resilience for those who serve the Lord. That includes helping you understand and make the most of your retirement plan as it relates to this new legislation. We will continue to update this webpage with further details as additional guidance becomes available.

Below are just a few highlights from the SECURE 2.0 Act. Please see our Summary of Provisions Relevant to 403(b) Church Plans for a more comprehensive look at this legislation.

The Required Minimum Distribution (RMD) age increased to 73.

Beginning January 1, 2023, the age to start taking your RMD is 73. An RMD is required if you have an employer-sponsored retirement plan (including 401(k) and 403(b) plans) or a Traditional IRA.

No changes have been made to RMD delays; if you are still actively employed for the entire year, you may continue to delay your RMD within that employer’s plan.

Additionally, the penalty for not taking your RMD has been reduced from 50 to 25%. However, as a service to you, GuideStone automatically distributes the RMD from your 403(b) or 401(k) account to ensure you avoid the IRS penalty.

So, when will your RMD be due?

  • If you were born in 1950 or earlier, your RMD age remains at 72.
  • If you were born between 1951 and 1959, your RMD age is now 73.
  • If you were born in 1960 or later, your RMD age will be 75*.

*In 2033, the RMD age will increase to 75.

Learn more about RMDs .

Receive Roth contributions from your employer if your plan allows.

This provision is effective immediately but will require payroll system updates and further IRS guidance before it can be adopted. If your plan permits Roth employer contributions, you can elect to receive employer-matching and/or non-matching contributions into a 403(b) and 401(k) plan designated as Roth. You must be fully vested in order to receive Roth employer contributions.

Experience expanded distribution flexibility for unforeseen circumstances.

Certain employees can receive penalty-free distributions from a 401(k) and/or 403(b) plan (avoiding the 10% early distribution penalty) if the employee:

  • Has a terminal illness, as determined by a physician (effective 2023)
  • Is a victim of domestic abuse (effective 2024)
  • Is using the distribution for payment of long-term care insurance premium (if permitted in your plan, effective 2026)

In addition, 403(b) and 401(k) plans can now provide for plan distributions of up to $22,000 and increased maximum loan limits of up to $100,000 in the cases of qualified federally declared disasters if permitted in their plan (effective for disasters occurring on or after January 26, 2021).

Establish an emergency savings account within your retirement plan.

If permitted in your plan, non-highly compensated employees may have the option to contribute to and access funds from an emergency savings account beginning in 2024. The limit for these accounts is $2,500, and the maximum contribution amount is 3% of the employee’s salary.

Save more as you pay for student loans.

If permitted in your plan, you can receive employer-matching contributions on qualified student loan payments beginning in 2024. This means that for every student loan payment made, your employer could contribute additional funds to your retirement account.

No RMDs required on Roth employer-sponsored plan dollars.

Beginning in 2024, RMDs on Roth-designated accounts in an employer-sponsored retirement plan (401(k) or 403(b)), will not be required. Prior to SECURE 2.0, Roth dollars in an employer-sponsored plan were factored into the annual RMD calculation.

Designate catch-up contributions as Roth for high earners.

Beginning in 2024, if employees with wages exceeding $145,000 (indexed), in the prior year, make catch-up contributions to an employer-sponsored retirement plan, these catch-up contributions must be designated as Roth.

Roll over education savings accounts to a Roth IRA.

Beginning in 2024, 529 account beneficiaries can make penalty-free rollovers into a Roth IRA if certain conditions are met.

New 401(k) and 403(b) ERISA plans must incorporate automatic enrollment.

Beginning in 2025, new ERISA plans must provide automatic enrollment provisions for their employees. This does not apply to church plans.

Save more as you move closer to retirement.

Beginning in 2025, employees ages 60-63 can make catch-up contributions up to the greater of $10,000 (indexed) or 150% of the regular catch-up amount in 2025.

The Saver’s Match will replace the Saver’s Credit.

Unlike the current law that provides for a tax credit for individuals who fall below a certain income level, SECURE 2.0 introduces a federal matching contribution into an IRA or retirement plan for those who are eligible, beginning in 2027. The match is 50% of your IRA or retirement plan contributions, up to $2,000 per individual.

View the full summary of SECURE 2.0 prepared by the Senate Finance Committee.

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