Congress passed the SECURE 2.0 Act of 2022, but some key provisions take effect in 2026.

MINNEAPOLIS — The new year is right around the corner and with it comes some big changes for your retirement accounts.

The changes stem from a new law, SECURE 2.0, that was first implemented three years ago. It’s meant to enhance retirement savings and must automatically enroll eligible employees.

The changes are also sweeping, but there are key provisions that financial expert Brian Muller suggests paying attention to.  

Muller is an experienced advisor who has helped people manage their money for 25 years and recently started his own company called Momentous Wealth Advisors.

The first major change is a higher limit for people 50 and older to make what’s called “catch-up” contributions to a tax-free Roth IRA. It’s helpful for people who couldn’t save enough sooner.

“You’re going to have to save less for retirement because it all comes out tax-free and you can create a better after-tax income,” said Muller. 

Secondly, the government requires you start withdrawing money from some of your retirement accounts at a certain age, or what’s known as Required Minimum Distribution (RMD). Secure 2.0 now increases that age from 72 to 73 and eventually 75. It also comes with a smaller penalty if you don’t. 

“The factors are based on average life expectancies of men and women, and because life expectancy has gone up, they’ve bumped the age up,” said Muller. “It also alleviates some pressure where people don’t have to take money if they don’t need it.”

The third biggest change affects emergency withdrawals. Those are now penalty-free withdrawals for disasters, domestic abuse and terminal illness.

There are several other changes you can read about here. The most you can contribute to a 401K in a year is $24,000, but some of these changes help you add thousands on to that.

And the easiest thing Muller says you can do is engage with your human resources or benefits department to understand how your employer is adapting to Secure 2.0. 

“At least you’re taking some action steps to be able to superfund your retirement and retire when you want to,” said Muller.