RMD Age Now 73 (Mandatory)

The age to start taking an RMD from a Traditional IRA is 73. An RMD is required from a 401(k) or 403(b) plan at the later of April 1 of the year you turn 73 or the year you retire.

In 2033, the RMD age will increase to 75.

RMD Penalty (Mandatory)

The penalty for not taking an RMD is 25%. However, as a service to members, GuideStone automatically distributes RMDs from 403(b) or 401(k) accounts.

RMDs on Roth Employer-sponsored Accounts (Mandatory)

Effective January 1, 2024, RMDs on Roth-designated accounts in an employer-sponsored plan (401(k) or 403(b) plans) will not be required.

RMDs for Surviving Spouses (Mandatory)

Effective January 1, 2024, spousal beneficiaries can elect to treat an inherited 403(b) or 401(k) as their own for RMD purposes.

Catch-up Limit Increase (Mandatory)

Effective January 1, 2025, employees ages 60–63 will be able to make catch-up contributions up to the greater of $11,250 for 2025 (indexed). This is 50% more than the regular catch-up amount.

Qualified Disaster Recovery Distributions (Optional)

If permitted in the 403(b) or 401(k) plan, a qualified federally declared disaster distributions of up to $22,000 will be available for an eligible employee.

Penalty-free Distributions (Optional)

• If permitted in the 403(b) or 401(k) plan, employees with a terminal illness, as determined by a physician, can avoid the 10% early distribution penalty.
• If permitted in the 403(b) or 401(k) plan, victims of domestic abuse can withdraw up to $10,000 (indexed) or 50% of their account balance and avoid the 10% early distribution penalty.
• Effective January 1, 2026, employees can receive up to $2,500 per year (indexed) from their retirement account when the distributions are used for payment of long-term care insurance premiums if permitted in the plan. These distributions are exempt from the 10% early distribution penalty.

Roth Catch-up Contributions for High Earners (Mandatory)

Effective January 1, 2026, if employees with wages exceeding $150,000 in 2025 will be required to make catch-up contributions as Roth contributions.

In 2026, you will need to identify FICA employees who earned wages more than $150,000 in Box 3 on the 2025 IRS Form W-2. SECA employees are not impacted by this new regulation.

Starting in 2026, any catch-up contributions to the retirement plan for an HPI must be Roth contributions. HPIs can make tax-sheltered contributions up to the base 2026 402(g) contribution limit of $24,500, but if they make age 50 catch-up or age 60-63 catch-up contributions, those catch-up contributions are required to be Roth.

SECURE Act 2.0 also requires these HPIs to be given the opportunity to opt out of making any Catch-up contributions if they don’t want their Catch-up contributions to be Roth. We’ll make a sample notice available around the end of this year.

If your retirement plan does not allow Roth deferrals, we recommend that you amend it to allow Roth deferrals beginning January 1, 2026. If you do not amend your retirement plan to allow Roth deferrals, catch-up contributions may have to be returned to the HPI.

If your retirement plan allows Roth deferrals, you may have a payroll system with built-in limits to help you change the contributions from tax-sheltered to Roth whenever an HPI’s contribution reaches the $24,500 402(g) limit . If your payroll system does not have built-in limits for HPIs to make Roth catch-up contributions in 2026, GuideStone may be able to help.

If an HPI makes Catch-up contributions as tax-sheltered contributions, GuideStone will work with you after the end of the year to convert any HPI employees’ Catch-up contributions to Roth through an In-Plan Roth Rollover (IPRR). This is a permitted IRS procedure as long as it is done by April 15th of the year following the Catch-up contributions. You will need to make sure your retirement plan allows for In-Plan Roth Rollovers before the end of 2026.

Employer Roth Contributions (Optional)

If permitted in the 403(b) or 401(k) plan, employees can elect to receive employer contributions (either matching and/or non-matching) as a Roth contribution. Employees must be fully vested to receive employer Roth contributions.

Student Loan Employer-matching (Optional)

If permitted in the 403(b) or 401(k) plan, employees may receive employer-matching contributions on qualified student loan payments.

Automatic Enrollment for New 401(k) and 403(b) ERISA Plans (Mandatory)

Beginning in 2025, new ERISA plans must provide automatic enrollment provisions for their employees. This does not apply to church plans. View our Guide for ERISA Plans for more ERISA-specific SECURE 2.0 provisions.