Key Highlights of SECURE Act 2.0

Posted by Busey Bank on Feb 22, 2023 9:30:00 AM
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In late December, the Setting Every Community Up for Retirement Enhancement 2.0 Act of 2022 (SECURE 2.0)—part of a giant omnibus budget bill—was passed by Congress and signed into law by the President. While the legislation passed before the end of the year, many sections did not immediately take effect on January 1, 2023, and will be implemented later.

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While the major focus of the legislation is retirement funding, please keep in mind there are various effective dates for different sections of the legislation. Also, there will likely be further delays in receiving guidance from the IRS. Below is a run-down of some of the key highlights:

  • Previously, individuals needed to start taking their Required Minimum Distributions (RMDs) at age 72. SECURE Act 2.0 boosted that age to 73 starting in January 2023, and then raises it again to age 75 in 2033. If you’re turning 72 in 2023 and have already scheduled your withdrawal, you may want to discuss with your advisors whether to reconsider.
  • Taxpayers will have two new opportunities for Roth contributions through the creation of both SIMPLE Roth accounts and Simplified Employee Pension (SEP) Roth IRAs in 2023 and beyond.
  • Workers aged 50 or younger can contribute $22,500 to an employer-sponsored retirement account in 2023. Those 50 and older can contribute an additional $7,500.
  • Workers aged 60 to 63 will be able to contribute the greater of $10,000 of their salary or 50% more than the regular catch-up amount in 2025.
  • Effective in 2027, the “Saver’s Credit” will be replaced by the “Saver’s Match.”
  • Required distributions are eliminated for employer-sponsored Roth 401(k)s starting in 2024.
  • The missed RMD penalty is reduced from 50% to 25% and 10% if corrected within two years.
  • Qualified charitable distributions (QCDs) will be indexed to inflation starting in 2024. The current limit is $100,000 per year. Beginning in 2023, people who are age 70½ or older may elect as part of their QCD limit a one-time gift up to $50,000—adjusted annually for inflation—to a charitable remainder unitrust, a charitable remainder annuity trust or a charitable gift annuity. This is an expansion of the type of charity, or charities, that can receive a QCD. 
  • Allows for tax- and penalty-free lifetime rollover worth up to $35,000 from 529 education savings plans into Roth IRAs beginning in 2024, subject to certain restrictions.

While it includes many changes to current provisions, there are several items the SECURE Act 2.0 did not change, including:

  • Limiting the use of the back-door Roth contributions.
  • Placing new limits on who can make Roth conversions.
  • Changing the age at which QCDs can be made, which continues to be age 70 ½.
  • Clarifying the manner in which the 10-Year Rule created by the original SECURE Act should be implemented for Non-Eligible Designated Beneficiaries.

The Act covers a lot of territory, especially regarding qualified retirement plans. More guidance will be issued, but now is the time to evaluate which sections impact you.


As always, our experienced Busey Wealth Management advisors are here to help clients plan for the future. To learn more about our comprehensive services or find an advisor near you, visit


This is not intended to provide legal, tax or accounting advice. Any statement contained in this communication concerning U.S. tax matters is not intended or written to be used, and cannot be used, for the purpose of avoiding penalties imposed on the relevant taxpayer. Clients should obtain their own independent tax advice based on their particular circumstances.

This material is provided for educational purposes only and should not be construed as investment advice or an offer or solicitation to buy or sell securities.

This presentation is for general information purposes only. It does not take into account the particular investment objectives, restrictions, tax and financial situation or other needs of any specific client.

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