top of page

Secure Your Future: In 2024 the Key Changes in the SECURE Act 2.0

Last year, the U.S. federal government gave us a wealth-building gift by enacting the SECURE Act 2.0.  This landmark legislation, signed into law in 2022, aims to make saving for retirement easier and more accessible for everyone.  But with so many changes, it can be hard to keep track. So to make sure you take advantage of this special gift, let's break down the key SECURE Act 2.0 changes for 2024 that could accelerate your wealth-building journey:

1. Your Emergency Savings Get a Boost:

  • As you are aware, facing an unexpected financial hit can be tough. You can now withdraw up to $1,000 penalty-free from your retirement account for qualified emergencies. Remember, you'll have to repay it within 3 years or face taxes and penalties.

2. Part-Time Workers Rejoice!

  • If you're a long-term part-time employee (LTPT), you're now eligible to join your employer's retirement plan after working at least 500 hours in each of the past 3 years. This opens doors for many previously excluded workers.

3. Your Roth 401(k)s Get Sweeter:

  • Great news for Roth lovers! Remember Roth accounts are tax free for life after meeting certain requirements.  Roth contributions in your employer-sponsored plan (401K-Roth) are no longer subject to Required Minimum Distributions (RMDs) at age 72. This means your tax-free Roth dollars can continue to grow untouched!

4. Your IRA or Employer Retirement Account Catch-Up Contributions Get Bigger:

  • Saving more for retirement later in life? The catch-up contribution limit for those 50 and older is increasing to an extra $7,500 for 401K or 403B accounts and an extra $1,000 for IRA accounts, giving you more room to boost your wealth-building nest egg.

5. Your Automatic Rollover Threshold Increased:

  • Have a small retirement account balance from a previous job? The automatic rollover threshold increased from $5,000 to $7,000, giving plans more flexibility in managing these accounts.

6. Matching Contributions on Student Loan Payment:

  • Employers can now make matching contributions on behalf of employees who make “qualified student loan payments” for higher education expenses (instead of making retirement plan contributions)! This exciting option helps tackle student debt while also building retirement savings.

7. 529 Plan (Tax Advantaged Education Savings Plan) Flexibility Expanded:

  • Looking to use your 529 plan for more than just education? You can now use up to $3,000 per year towards qualified apprenticeship expenses. This opens doors for more diverse educational and career paths.

Remember: These are just some of the key changes from the SECURE Act 2.0. It's important to talk to your financial advisor or plan administrator to understand how these updates apply to your specific situation and to help you make informed decisions about your financial future.

Reminder that Paycheck to Wealth is here to help you sort through these changes enacted by SECURE Act 2.0.  Please contact us to learn more.

Disclaimer: This blog is for informational purposes only and should not be considered financial advice for your personal situation. Please consult with a qualified professional for personalized guidance.

12 views0 comments


bottom of page