SECURE Act 2.0: Ongoing Implementation Updates

Bottom Line Up Front: Three major SECURE Act 2.0 changes took effect January 1, 2025, that high earners need to understand: enhanced catch-up contributions for ages 60-63 (up to $34,750 total), mandatory automatic enrollment for new 401(k) plans, and expanded eligibility for part-time workers. Plus, the big Roth catch-up requirement for high earners earning over $145,000 is coming in 2026—giving you time to prepare your tax strategy now.

If you're a high earner who's been following retirement planning news, you've probably heard plenty about the SECURE Act 2.0 since it passed in December 2022. But here's what you might not realize: we're still in the thick of implementation, with significant changes rolling out in 2025 and more coming in 2026.

The challenge? Many of these changes are complex, interconnected, and create both opportunities and potential pitfalls for sophisticated savers. If your financial advisor hasn't proactively discussed these updates with you, that's a red flag—because the implications for high-income earners are substantial.

Let's break down what's happening now, what's coming next, and how these changes might impact your retirement strategy.

The Three Big Changes That Just Took Effect in 2025

1. Enhanced Catch-Up Contributions for Ages 60-63

This is probably the most immediately valuable change for high earners approaching retirement. Starting in 2025, if you're between ages 60 and 63, you can make catch-up contributions of up to $11,250 to your 401(k), 403(b), or governmental 457(b) plan—that's $3,750 more than the standard $7,500 catch-up limit for those 50 and older.

2025 Contribution Limits at a Glance

The enhanced catch-up alone (that extra $3,750) could save between $1,200 and $1,388 in federal taxes annually for high earners in the 32% or 37% tax bracket.

But there's a catch—literally. You're only eligible during the calendar years when you turn 60, 61, 62, or 63. Turn 64? You're back to the standard catch-up limits. People who turn 64 before year-end are not eligible for the extra catch-up.

Action item: If you're in this age range, verify with your employer that your plan has adopted this feature. Eighty-four percent of plans surveyed by T. Rowe Price have adopted the super catch-up, but that means 16% haven't. Don't assume, ask.

2. Mandatory Automatic Enrollment for New 401(k) Plans

This change won't affect most readers directly, but it's worth understanding because it signals where retirement policy is headed. Starting January 2025, any 401(k) or 403(b) plan established after December 29, 2022, must automatically enroll eligible employees at a default contribution rate between 3% and 10% of salary, with automatic annual increases of at least 1% until reaching at least 10% but no more than 15%.

The exemptions are notable: businesses with 10 or fewer employees, businesses less than three years old, church and governmental plans, and SIMPLE (Savings Incentive Match Plan for Employees) 401(k) plans are all exempt.

If you're a business owner, this could affect your planning in two ways. First, if you're establishing a new plan, you'll need to build automatic enrollment into your design. Second, small businesses with fewer than 50 employees are eligible for up to $50,000 in tax credits for a newly established plan, which could make now an attractive time to set up a plan.

3. Expanded Part-Time Worker Eligibility

SECURE 2.0 redefines "long-term part-time employees" to be employees who complete at least 500 hours of service in two consecutive years, down from the previous requirements of three consecutive years.

Again, this might not affect you personally, but if you're a business owner with part-time employees, you'll need to track hours and potentially extend plan eligibility. The administrative burden is real, but part-time workers are disproportionately women, younger folks and older folks who are working a part-time job before they retire, so this change addresses important coverage gaps.

The 2026 Change That's Already Affecting Planning: Roth Catch-Up Requirements

Here's where things get interesting for high earners. Starting in 2026, catch-up contributions for participants aged 50 and older who earned more than $145,000 in the previous year must be made on a Roth basis, meaning after-tax dollars. Note that this $145,000 threshold is indexed for inflation and will be adjusted annually for cost-of-living increases, so the actual threshold in 2026 and beyond will likely be higher.

Important caveat: This requirement only applies if your plan offers designated Roth contributions. If your employer's plan doesn't have a Roth feature, you may be unable to make catch-up contributions at all once this provision takes effect, unless your employer adds Roth capability to the plan. The IRS final regulations address implementation requirements, but plan sponsors will need to decide whether to add Roth features or potentially limit catch-up availability for affected employees.

SECURE 2.0 Implementation Timeline

This Roth catch-up requirement is a significant change that flips traditional catch-up strategy on its head. Instead of getting an immediate tax deduction for your catch-up contributions, you'll pay taxes upfront but get tax-free withdrawals in retirement.

The financial impact depends on your tax situation, but consider this comparison:

2025 vs. 2026 Catch-Up Contribution Tax Impact Example

The key question: Will your tax rate in retirement be higher or lower than your current rate? If you expect to be in a lower bracket in retirement (common for high earners), the forced Roth treatment could cost you. If you expect similar or higher rates, the Roth treatment might actually benefit you.

The IRS has issued final regulations that generally apply to contributions in taxable years beginning after December 31, 2026, with later applicability dates for certain governmental plans and collectively bargained plans. Note that specific applicability and timing can vary by plan type and may be subject to additional IRS guidance.

Action item: Start discussing this change with your tax advisor now. You have time to adjust your overall tax strategy, potentially shifting some traditional IRA contributions to Roth to balance your future tax situation.

Other Notable Updates Coming Through 2025

Required Minimum Distribution Changes

The age at which owners of retirement accounts must start taking Required Minimum Distributions (RMDs) increased to 73 as of January 2023, and will increase again to 75 starting in 2033. This gives high earners more time to let retirement accounts grow before forced distributions begin.

Qualified Longevity Annuity Contracts (QLACs) Expansion

The dollar limitation for Qualified Longevity Annuity Contract (QLAC) premiums increased to $210,000 from $200,000 as of January 1, 2025, and the law eliminated a previous requirement that limited premiums to 25% of an individual's retirement account balance.

For high earners with substantial retirement account balances, QLACs can be a sophisticated strategy to manage RMD requirements while securing guaranteed income in very late retirement.

What This Means for Your Planning Strategy

These changes create several planning opportunities, but only if you're proactive:

For ages 60-63: Maximize the enhanced catch-up if your plan offers it. Over four years with investment growth, the additional contributions could add over $20,000 to your retirement balance.

For high earners approaching 50: Start planning for the 2026 Roth catch-up requirement now. Consider whether it makes sense to shift some of your current retirement contributions to Roth accounts to create tax diversification.

For business owners: Review whether the new plan incentives make sense for your situation, especially if you don't currently offer a retirement plan.

For everyone: Verify that your current plan has implemented the relevant SECURE 2.0 features. Not all plans move quickly on optional provisions.

The Fee Structure Problem Gets More Complex

Here's something most people don't consider: these SECURE 2.0 changes make the choice of financial advisor even more critical. The planning opportunities are real, but they require expertise in areas that many advisors simply don't understand well.

Think about it: optimizing the enhanced catch-up requires understanding not just the contribution limits, but how they interact with your overall tax strategy, your expected retirement timeline, and the 2026 Roth requirement. Planning for QLACs requires knowledge of annuity structures, RMD optimization, and estate planning implications.

If you're paying a 1% annual fee on a $2 million portfolio ($20,000 per year), you should expect this level of proactive guidance. But many AUM-based advisors focus their time on investment management rather than staying current on complex planning strategies—especially when those strategies might result in assets staying in employer plans rather than being rolled over to accounts they manage.

This is another area where flat fee financial advisors often provide superior value. When their compensation isn't tied to gathering assets, they can focus purely on optimizing your situation, even if that means recommending you maximize contributions to your employer plan rather than rolling assets over to their management.

Implementation Still in Progress

One of the most important things to understand about SECURE 2.0 is that we're still in the implementation phase. Although the IRS extended the deadline for plans to adopt SECURE 2.0 amendments until December 31, 2026 (December 31, 2028 for collectively bargained plans, December 31, 2029 for governmental plans), plan sponsors must comply operationally with provisions going into effect.

This creates a window where some plans may not have fully implemented all features, some administrative processes are still being refined, and guidance is still being issued. Stay engaged with your plan administrator and advisor to ensure you're not missing opportunities.

Your Next Steps

The SECURE Act 2.0 changes are generally positive for retirement savers, but they require active engagement to optimize. Here's what you should do:

1. Review your current contribution strategy with particular attention to the 2026 Roth catch-up requirement if you're a high earner approaching 50.
2. Verify your plan's features if you're in the 60-63 age range or will be soon. Don't assume your plan has adopted the enhanced catch-up.
3. Assess your advisor's expertise in these areas. If they haven't proactively discussed SECURE 2.0 implications with you, that suggests they might not be staying current on developments that could significantly impact your planning.
4. Consider the broader context of your retirement tax strategy, especially with RMD age increases and the coming Roth catch-up requirements.

The retirement planning landscape continues to evolve, and these changes create both opportunities and complexities. Make sure your financial planning approach, and your advisor, can keep pace with these developments.

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