The SECURE 2.0 Act was approved on December 29, 2022, as part of the Consolidated Appropriations Act of 2023. Recently I learned some of the benefits that went into effect January 10, 2025, including the new retirement rules for 2025. Let’s take a look at two parts of the Act for anyone looking for OverSixtyInsights!
Key Provisions for 60-63 year olds
If you’re between 60 and 63, 2025 brings a significant opportunity to boost your retirement savings under SECURE 2.0 Act starting January 10, 2025. Here’s what you need to know;
Supercharged Catch-Up Contributions
Individuals aged 60 to 63 can make enhanced “super catch-up” contributions to their 401(k), 403(b), or 457(b) plans. The limit increases from the standard $7,500 to 150% of the standard deduction or $11,250 for 2025. For 2025 if you are 60-63 you can contribution of up to $34,750 when combined with the standard contribution of $23,500.
This Supercharged catch up is ONLY for people ages 60, 61, 62 and 63. Starting at 64 you go back down to the $7,500 regular amount. Alll figures are indexed for inflation in future years. Check IRS charts for increases.
Roth Requirement for High Earners
Of course, there is a catch. Beginning in 2026, if you earn more than $145,000 (adjusted annually for inflation), you’ll be required to make all 401(k) catch-up contributions as Roth contributions—using after-tax dollars. This requirement applies to both the standard catch-up contributions available to individuals aged 50 and over and the enhanced “super catch-up” contributions for those aged 60 to 63. This means you will not receive a tax deduction for these contributions, but qualified withdrawals in retirement will be tax-free.
It will be important to talk with a financial professional (accountant or financial advisor) to make sure you look at the tax implications especially as a high earner, you may pay more taxes today and could pay less in the future when you retire.
Action Steps
- Check Plan Participation: Confirm with your employer if they offer the super catch-up option.
- Assess Income: Determine if the Roth requirement applies to you based on your earnings and check the tax implications.
- Plan Contributions: Adjust your savings plan to take advantage of the increased limits
This is a valuable opportunity to enhance your retirement savings during your peak earning years. Consult with a financial advisor to make the most of these changes.
Required Minimum Distribution Changes
Another part of the Secure 2.0 Act that is important for anyone in retirement is the Required Minimum Distribution Changes (RMD). Traditionally, retirees needed to begin taking RMDs at age 72. The Secure 2.0 Act moved those ages up as follows:
| Year | RMD Starting Age |
| Before 2023 | 72 |
| 2023-2032 | 73 |
| 2033 and Beyond | 75 |
So, if you are nearing retirement or in retirement, I hope you can take advantage of these new changes to the IRS code. Remember, these posts are for entertainment purposes only. Consult a financial professional to see how these changes will affect your finances personally.
