In late December 2022, President Biden signed the Consolidated Appropriations Act of 2023, a sweeping $1.7 trillion omnibus spending bill. Tucked inside that legislation was the SECURE 2.0 Act of 2022, a landmark set of retirement savings reforms building on the original SECURE Act of 2019. Three years later, most of these provisions are fully in effect and reshaping how Americans save for retirement.

Whether you contribute to a 401(k), a 403(b), an IRA, or a combination of accounts, SECURE 2.0 introduced changes you need to understand. Below is a practical guide to the key provisions, updated with the latest contribution limits and rules for 2025 and 2026.

What Is the SECURE 2.0 Act?

The SECURE 2.0 Act (Setting Every Community Up for Retirement Enhancement) is a federal law designed to expand retirement plan access, increase savings rates, and give older workers more flexibility. It introduced dozens of provisions phased in between 2023 and 2027. The most significant changes affect automatic enrollment, catch-up contribution limits, required minimum distributions (RMDs), Roth rules for high earners, and new savings pathways like 529-to-Roth rollovers.

Mandatory Automatic Enrollment in 401(k) and 403(b) Plans

One of SECURE 2.0's headline provisions requires automatic enrollment in new 401(k) and 403(b) plans. Starting with plan years beginning after December 31, 2024, any plan established after December 29, 2022 must automatically enroll eligible employees at a default contribution rate between 3% and 10% of compensation. That rate must increase by 1% each year until it reaches at least 10% (but no more than 15%). Employees can opt out or adjust their contribution level at any time.

This requirement does not apply to every employer. The following are exempt:

  • Plans that existed on or before December 29, 2022 (grandfathered plans)
  • Businesses in existence for fewer than three years
  • Employers with 10 or fewer employees
  • Church plans and governmental plans

The Treasury Department issued proposed regulations in January 2025 clarifying these rules. If you are a small business owner considering a new retirement plan, automatic enrollment is now a built-in compliance requirement.

Higher Catch-Up Contributions (and the New Super Catch-Up for Ages 60 to 63)

Catch-up contributions allow participants age 50 and older to save beyond the standard elective deferral limit. SECURE 2.0 kept the existing catch-up framework and added a "super catch-up" tier for employees aged 60 through 63.

Here are the current limits for 401(k), 403(b), and most 457(b) plans:

2025 Contribution Limits

  • Standard elective deferral (under age 50): $23,500
  • Catch-up for ages 50 to 59 and 64+: $7,500 (total limit $31,000)
  • Super catch-up for ages 60 to 63: $11,250 (total limit $34,750)

2026 Contribution Limits

  • Standard elective deferral (under age 50): $24,500
  • Catch-up for ages 50 to 59 and 64+: $8,000 (total limit $32,500)
  • Super catch-up for ages 60 to 63: $11,250 (total limit $35,750)

The super catch-up is designed to help workers in their early 60s accelerate savings right before retirement. The $11,250 figure represents 150% of the standard catch-up limit and is subject to annual inflation adjustments by the IRS.

Roth Catch-Up Mandate for High Earners (Effective 2026)

Starting January 1, 2026, SECURE 2.0 requires that participants age 50 and older whose prior-year FICA wages from the plan sponsor exceeded $150,000 must make all catch-up contributions on a Roth (after-tax) basis. Pre-tax catch-up contributions are no longer available for this group.

Key details of this rule:

  • The $150,000 threshold is based on W-2 wages from the specific employer sponsoring the plan in the prior tax year.
  • If your plan does not offer a Roth option, you may not be able to make catch-up contributions at all. Check with your plan administrator.
  • Self-employed individuals without W-2 wages from a plan sponsor are generally not subject to this requirement.
  • IRA catch-up contributions are not affected by this Roth mandate.

If you earned more than $150,000 in FICA wages during 2025, your 2026 catch-up contributions must go into a Roth account. While you lose the upfront tax deduction, Roth contributions grow tax-free and qualified withdrawals in retirement are not taxed.

Higher Age Threshold for Required Minimum Distributions

Before SECURE 2.0, participants had to begin taking required minimum distributions (RMDs) at age 72. The law raised that threshold in two stages:

  • Age 73: Applies to individuals who turned 72 after December 31, 2022 and who turn 73 before January 1, 2033. This is the current RMD age for most retirees in 2026.
  • Age 75: Applies to individuals who turn 74 after December 31, 2032. This increase takes effect in 2033.

The higher RMD age gives your retirement funds additional years of tax-deferred (or tax-free, for Roth accounts) growth. Note that Roth IRAs are not subject to RMDs during the account owner's lifetime, though Roth accounts inside 401(k) and 403(b) plans were historically subject to RMDs. SECURE 2.0 eliminated that requirement for designated Roth accounts in employer plans starting in 2024.

Other SECURE 2.0 Provisions Now in Effect

Beyond the three headline changes, several additional SECURE 2.0 provisions are relevant for 2026 retirement planning:

  • 529-to-Roth IRA rollovers: Beneficiaries of 529 college savings plans that have been open for at least 15 years can roll over unused funds to a Roth IRA, up to a $35,000 lifetime cap. The annual rollover amount is limited to the Roth IRA contribution limit for that year ($7,500 in 2026), and the beneficiary must have earned income.
  • Student loan employer match: Employers can now make matching contributions to an employee's 401(k) based on qualified student loan payments, even if the employee is not contributing directly to the plan. This helps borrowers build retirement savings while paying down debt.
  • Emergency savings accounts: Employers may offer a Roth-style emergency savings sidecar within a workplace retirement plan, with a balance cap of $2,500. Withdrawals are penalty-free.
  • Reduced RMD penalties: The penalty for failing to take an RMD dropped from 50% to 25% of the shortfall, and to 10% if corrected within two years.

IRA Contribution Limits for 2025 and 2026

While SECURE 2.0 primarily targets employer-sponsored plans, IRA limits also increased for 2026:

  • 2025: $7,000 (catch-up for age 50+: $1,000, total $8,000)
  • 2026: $7,500 (catch-up for age 50+: $1,100, total $8,600)

The IRA catch-up contribution amount is now indexed for inflation starting in 2024 under SECURE 2.0. Previously, it had been a flat $1,000 for decades. If you are deciding between a traditional IRA and a Roth IRA, the choice depends on your current tax bracket, expected retirement income, and Arizona residency status.

Arizona Considerations for Retirement Savings

Arizona offers a favorable environment for retirees and retirement savers:

  • No state tax on Social Security: Arizona does not tax Social Security benefits at the state level, though federal taxation still applies (up to 85% may be taxable based on provisional income).
  • Flat 2.5% income tax: Arizona's flat individual income tax rate of 2.5% applies to retirement income from 401(k)s, IRAs, and pensions. This is among the lowest state income tax rates in the country.
  • Federal conformity: Arizona generally conforms to federal tax treatment of retirement account contributions and distributions, meaning your federal deductions for traditional IRA and 401(k) contributions flow through to your Arizona return.
  • Senior deduction under OBBBA: For tax years 2025 through 2028, the One Big Beautiful Bill Act provides a $6,000 federal deduction for taxpayers age 65 and older (phasing out above $75,000 single / $150,000 married filing jointly). This benefits Arizona retirees at both the federal and state level.

Frequently Asked Questions

Does the auto-enrollment requirement apply to my existing 401(k) plan?

No. The SECURE 2.0 automatic enrollment mandate applies only to 401(k) and 403(b) plans established after December 29, 2022. If your plan existed before that date, it is grandfathered and not required to auto-enroll. Small employers (fewer than 10 employees), new businesses (under 3 years old), church plans, and government plans are also exempt.

What is the super catch-up contribution?

The super catch-up allows 401(k) and 403(b) participants aged 60 through 63 to contribute up to $11,250 above the standard deferral limit in 2025 and 2026. This is higher than the regular catch-up of $7,500 (2025) or $8,000 (2026) available to those aged 50 to 59 and 64 and older.

Do I have to make my catch-up contributions as Roth in 2026?

Only if your FICA wages from your employer exceeded $150,000 in the prior year (2025). If you earned less than that threshold, you can continue making catch-up contributions on either a pre-tax or Roth basis. IRA catch-up contributions are not affected by this mandate.

When do I need to start taking RMDs?

If you turn 73 during 2026 (and did not already begin RMDs), your first RMD is due by April 1, 2027. The RMD age increases to 75 starting in 2033 for individuals born in 1960 or later.

Can I roll unused 529 funds into a Roth IRA?

Yes, under SECURE 2.0, you can roll over up to $35,000 lifetime from a 529 plan into the beneficiary's Roth IRA, provided the 529 has been open at least 15 years, the funds being rolled have been in the account at least 5 years, and the beneficiary has earned income. Annual rollovers are capped at the Roth IRA contribution limit.

How K&R Taxes Can Help

Retirement planning involves coordinating contribution limits, Roth decisions, RMD timing, and state tax implications. At K&R Taxes, we help Arizona individuals and business owners structure their tax planning around retirement savings strategies. Whether you need help maximizing employer plan contributions, evaluating a self-directed retirement account, or understanding the tax impact of RMDs, our team provides clear guidance tailored to your situation.

If you are a business owner setting up a new retirement plan, we can advise on auto-enrollment compliance, contribution matching strategies, and the differences between qualified and nonqualified plans. Contact our office to schedule a consultation.