The Retirement Rules Changed More Than You Probably Realize
SECURE 2.0 quietly updated some of the most important rules in retirement planning. Here is what is different now.
The law that changed retirement planning more than anything in the last two decades passed quietly in December 2022. Most people have heard of SECURE 2.0. Very few know what it actually changed. And some of the most meaningful updates only took effect in 2025.
If you are in your 50s or early 60s, this law affects you directly. Not all of it applies to every situation, but enough of it does that it is worth knowing what is different now. A few of these changes are genuinely significant and still flying under the radar.
The Age When You Must Start Taking Withdrawals Moved
Required minimum distributions now begin at age 73 instead of 72. That is one more year of tax deferred growth before the IRS starts requiring you to pull money out of your pretax accounts whether you want to or not.
For people born in 1960 or later, the starting age moves again to 75 in 2033. That is a meaningful planning window if you do not need to start drawing down retirement accounts right away. More time in the account means more flexibility in how and when you pay taxes on that money.
Roth Money in Your 401(k) No Longer Has a Required Distribution
This one is significant and still not widely known. Before SECURE 2.0, Roth funds held inside an employer sponsored 401(k) or 403(b) were subject to required minimum distributions, just like pretax funds. That changed in 2024.
Roth balances in a workplace retirement plan are now treated like a Roth IRA during your lifetime. No required distributions. The money can keep growing tax free without the IRS forcing you to take it out. If you have been making Roth contributions to your workplace plan, this changes how you might think about your distribution strategy in retirement.
Ages 60 to 63 Now Have a Larger Catch Up Contribution Window
How the numbers work starting in 2025
The standard 401(k) catch up contribution for people over 50 is $7,500. For people between ages 60 and 63, that limit increases to 150% of the standard amount, bringing the catch up to $11,250 for this group.
Once you turn 64 the enhanced amount goes away and the standard catch up resumes. This makes the years between 60 and 63 a specific opportunity to put more away in the final push before retirement.
IRA Catch Up Contributions Are Now Indexed to Inflation
A smaller change but a useful one. The IRA catch up contribution for people over 50 was stuck at $1,000 for years regardless of what was happening with inflation. SECURE 2.0 indexed it to inflation starting in 2024, so it will increase gradually over time. Not dramatic on its own, but compounded over years it adds up.
You Can Now Use Your 401(k) to Pay Long Term Care Insurance Premiums
A few things to know before you assume this applies to you
This provision took effect on December 29, 2025, and very few people are talking about it. Qualified retirement plans can now allow participants to take up to $2,600 per year as a penalty free distribution to pay for qualifying long term care insurance premiums. The distribution is still subject to ordinary income tax. The 10% early withdrawal penalty simply does not apply.
The plan has to choose to offer it. Most plans have not added this option yet. It also only applies to active employees, so an old 401(k) from a former employer likely does not qualify. And the long term care insurance contract itself must meet specific quality standards to be eligible.
For people in their 50s who have a long term care policy and are looking for ways to cover rising premiums without tapping liquid savings, this is worth confirming with your plan administrator.
Surviving Spouses Have More Flexibility on Required Distributions
Starting in 2024, a surviving spouse can elect to be treated as the deceased spouse for RMD purposes. When the surviving spouse is younger than the deceased, this can result in lower required distributions and more time for the account to grow. It is a meaningful planning opportunity in a situation that is already difficult, and it is one that a lot of families are not aware they have.
One Thing to Keep in Mind
Not every plan has adopted every provision. SECURE 2.0 made many of these options available to plan sponsors but did not make all of them mandatory. If something in this post sounds relevant to your situation, the next step is confirming whether your specific plan or account type actually allows it.
Reading about a new rule and assuming it applies to you are two different things. That is a conversation worth having before you act on anything.
Want to know which of these changes apply to your specific accounts and what they mean for your plan? That review could change how you approach the next few years before retirement. Reach out and we can walk through your situation together.
Alfred Edmonds is an Investment Advisor Representative at Cetera Investors in San Jose, CA. He specializes in retirement income planning for California educators, pre-retirees, and high net worth individuals. This content is for informational and educational purposes only and does not constitute financial, tax, or legal advice. Contribution limits and dollar thresholds referenced are subject to annual adjustment. Please consult a qualified financial or tax professional regarding your specific situation. A diversified portfolio does not assure a profit or protect against loss in a declining market.