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.

New Required Minimum Distribution (RMD) Rules

RMD Age Now 73 (Mandatory)

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

  • 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.

RMD Penalty (Mandatory)

Effective January 1, 2023, the penalty for not taking an RMD has been reduced from 50 to 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)), 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.

Expanded Savings and Distribution Flexibility

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 $10,000 (indexed) or 50% more than the regular catch-up amount in 2025.

Qualified Disaster Recovery Distributions (Optional)

Effective for qualified disasters occurring on or after January 26, 2021, 403(b) and 401(k) plans can provide for distributions of up to $22,000 for an eligible employee.

Penalty-free Distributions (Optional)

  • Effective January 1, 2023, employees with a terminal illness, as determined by a physician, can avoid the 10% early distribution penalty when they receive distributions from their 401(k) and/or 403(b) if permitted in the plan.
  • Effective January 1, 2024, victims of domestic abuse can withdraw up to $10,000 (indexed) or 50% of their account balance and avoid the 10% early distribution penalty if permitted in the plan.
  • 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

Roth Catch-up Contributions for High Earners (Mandatory)

Effective January 1, 2026, 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.

  • It is important that you begin working with payroll providers prior to January 1, 2026, to ensure that your payroll system is ready to accommodate these changes.
  • If your plan does not currently offer Roth contributions, you will need to eliminate your catch-up provision for high earners.
New Avenues for Employer-matching Contributions

Employer Roth Contributions (Optional)

Effective January 1, 2023, employees can elect to receive employer contributions (either matching and/or non-matching) as a Roth contribution in a 403(b) and 401(k), if permitted in the plan. Employees must be fully vested to receive employer Roth contributions.

Student Loan Employer-matching (Optional)

Effective January 1, 2024, employees may receive employer-matching contributions on qualified student loan payments if permitted in their plan.

Automatic Enrollment for ERISA Plans

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.

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

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