As we approach year-end, many individuals in or near retirement are looking at the bigger picture for their financial future, and legislative changes are part of that equation. One law in particular, the SECURE Act 2.0, is bringing a series of important updates to retirement planning, with several key provisions set to take effect in 2026.
Understanding these changes today can help you adjust your savings and distribution strategies well in advance. Whether you’re contributing to a 401(k), planning for required minimum distributions (RMDs), or considering Roth conversions, it’s a good time to revisit your retirement plan.
Key SECURE Act 2.0 Changes Taking Effect in 2026
1. Mandatory Roth Catch-Up Contributions for High Earners
Beginning January 1, 2026, employees aged 50 or older who earn more than $145,000 (indexed for inflation) in wages from their employer must make all catch-up contributions to a Roth (after-tax) account if participating in a 401(k), 403(b), or 457(b) plan.
Why this matters:
- No more tax deduction for catch-up contributions if you earn above the income threshold.
- Only applies to wage income from the employer sponsoring the plan (not self-employment or investment income).
- If your workplace plan doesn’t offer a Roth option, you may be temporarily ineligible to make catch-up contributions until a Roth option is available.
✅ Planning Tip: Review your plan’s Roth option now and project your 2025 income to determine whether this change will apply to you in 2026.
2. “Super” Catch-Up Contributions for Ages 60–63
Starting in 2025 (relevant for 2026 planning), individuals aged 60 to 63 can make an enhanced catch-up contribution equal to the greater of $10,000 or 150% of the standard catch-up limit for that year. The limit will be indexed for inflation going forward.
For example, if the regular catch-up contribution is $7,500, those aged 60–63 could contribute up to $11,250.
Why this matters:
- This is a valuable opportunity to enhance your retirement savings during your peak earning years.
- Especially valuable if you’re slightly behind on savings or nearing early retirement.
3. RMD (Required Minimum Distribution) Trends and Roth Exemption
While not new for 2026, these provisions remain important in your overall retirement income planning:
- RMD Age Increases: The age to begin taking RMDs has increased to 73 for those born between 1951 and 1959, and will rise to 75 for those born in 1960 or later.
- Roth 401(k) Exemption: As of 2024, Roth 401(k)s are no longer subject to RMDs, aligning with Roth IRAs.
Why this matters:
- Delaying RMDs can extend tax-deferred growth and reduce taxable income early in retirement.
- A Roth 401(k) may offer additional flexibility in managing taxable income later in retirement.
4. Other Changes to Be Aware Of
- Automatic Enrollment Rules: Beginning in 2025, most new 401(k) and 403(b) plans must automatically enroll eligible employees unless they opt out. This is intended to increase participation and encourage earlier retirement saving.
- 529-to-Roth IRA Transfers: Leftover 529 plan funds may be rolled into a Roth IRA for the beneficiary under certain conditions. This new provision offers more flexibility for unused education savings. However, this transfer is subject to several rules:
- A $35,000 lifetime cap applies
- The 529 plan must have been open for at least 15 years
- Contributions made within the last five years are ineligible
- The beneficiary must have earned income at least equal to the amount being transferred in a given year.
- Student Loan Matching: Employers can now treat qualified student loan payments made by employees as elective deferrals for the purpose of matching contributions to workplace retirement plans. This may help younger workers who are prioritizing debt repayment begin building retirement savings earlier.
Action Steps to Consider Before 2026
The rules are changing; here’s how to prepare:
✅ Review Your Retirement Plan
Check if your employer offers a Roth option and whether your compensation is likely to exceed the $145,000 threshold in the coming year.
✅ Revisit Your Tax Strategy
Determine if Roth contributions align with your expected future tax bracket and long-term income needs.
✅ Maximize “Super Catch-Up” Savings
If you’re in the 60–63 age range (or will be soon), consider taking advantage of these increased contribution limits while you can.
✅ Align Withdrawals with RMD Planning
Assess whether your RMDs could increase your taxable income and explore potential strategies with your advisor.
✅ Business Owners: Update Your Retirement Plan
If you sponsor a plan for your employees, review plan design and implementation to ensure compliance with Roth catch-up rules and auto-enrollment provisions.
Let’s Prepare for These Changes Strategically
The SECURE Act 2.0 is more than just a policy update; it’s a chance to take a fresh look at how your retirement strategy aligns with your goals, income needs, and tax profile.
At IM Wealth Partners, we provide independent, holistic financial planning designed to help you make informed, forward-looking decisions with clarity. If you’re approaching retirement or already in it, we’re here to help you understand how these changes may impact your savings, income, and estate plans.
Reach out to schedule a complimentary consultation, and let’s explore how your retirement strategy aligns with what’s ahead.