How SECURE 2.0 can help retirement planning

The SECURE 2.0 Act passed in 2022 as a step to make it easier for people to save for retirement. The full name, "Setting Every Community Up for Retirement Enhancement," speaks to the goal: Increasing retirement savings opportunities, closing coverage gaps, and reducing administrative burdens and financial costs for employers who sponsor retirement plans.

Many facets of the act directly relate to people still in the workforce:

• Mandatory auto-enrollment for 401(k) and 403(b) plans, with minimum contributions of 3% and maximum of 10%.
• Incremental increases in automatic contributions of 1% annually, with a cap of 15%
• Employers can match student loan payments

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Changes rolled out incrementally, with some affecting seniors coming into play in 2025 and 2026. In essence, SECURE 2.0 affects working Americans at every stage of life.

"Phase one in someone's life is the ‘accumulation years,' where they're growing their wealth, 401(k)s, 403(b)s. It's all about rates of return, company matches, and asset allocation. It's relatively simple," said Stephen Dissette, Investment Advisor Representative with Horter Investment Management.

As retirement nears, however, financial planning gets more complicated. "It's a whole new ballgame, and there are things people just aren't aware of," said Dissette, noting that he favors the KISS principle, which he translates as "Keep It Simple and Sincere."

Understanding how 2.0 can change your retirement planning and the taxes you pay after retirement could help you keep more money in your pocket in your later years.

First, let's look at the new rules SECURE 2.0 puts into play relevant to the 50+ crowd.

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Increased Catch-up Contributions for Adults Ages 60 to 63

In 2026, adults 50+ can increase their catch-up contributions for 401(k), 403(b), and 457 plans by $8,000, a $500 increase from 2025. Adults ages 60 to 63 can take advantage of "super" catch-ups of $11,250, for a total contribution of $35,750 in 2026.

Traditional IRAs have a catch-up contribution limit of $1,100 for workers aged 50+ in 2026.

These increased catch-up contributions can especially help people in their 50s and 60s who feel they are behind in retirement savings. They might have gotten a late start, had lower earning years early on where they couldn't contribute as much as they wanted, or want to reduce their tax liability now as a high earner.

New Roth Requirements

Under SECURE 2.0, catch-up contributions to a workplace plan if you're 50+ and earned more than $150,000 in 2025, must go into a Roth account with after-tax dollars. The maximum salary will be indexed for inflation moving forward.

"Some people think this is a negative," Dissette said. "I think it's very positive."

‘Seeds' vs. ‘harvest'

Dissette presented an analogy, asking if most people would prefer to pay taxes on seeds they are just beginning to plant (early career income) or on the harvest, which has blossomed and is worth more (post-retirement withdrawals).

"Do you want to pay a little tax when the taxable amount is smaller or wait until later in life?" he said.

In the past, people assumed they'd be retiring with less income than they had during their working years, Dissette asserted. But that's not always the case today.

"I'm seeing a lot of people who want to retire with the same standard of living they had when they were working. They want at least the same amount of income. And some are even in higher tax brackets post-retirement," he said.

That's where after-tax retirement contributions can benefit upper-middle class and high earners close to retirement.

"The biggest mistake retirees make is treating Social Security and IRAs as separate buckets rather than a coordinated ecosystem."

Avoid the ‘Combined Income' Trap

Putting money into Roth IRAs using after-tax dollars can also help retirees avoid landing in a higher marginal tax bracket or falling into what Dissette called "the combined income trap."

If you're collecting Social Security, the IRS calculates your tax bracket based on your adjusted gross income (AGI), plus non-taxable interest paid during the tax year, and one-half of your Social Security benefits.

But there are thresholds for Social Security. For single filers earning between $25,000 and $34,000, up to 50% of benefits are taxable. That percentage jumps to 85% for anyone earning more than $34,000. Married couples, filing jointly, pay taxes on up to 50% of their Social Security benefits if they earn between $32,000 and $44,000, and up to 85% if they earn more than $44,000.

A small increase in taxable income can bump you into a higher tax bracket, leading to a much higher tax bill.

"The biggest mistake retirees make is treating Social Security and IRAs as separate buckets rather than a coordinated ecosystem," Dissette said.

Maxing out contributions with after-tax dollars during your working years can help avoid this scenario.

Higher age for RMDs

There's more good news for retirees who want to reduce their tax liability and keep more of what they earned and saved. The SECURE 2.0 Act increased the age for Required Minimum Distributions (RMDs) from retirement accounts to age 75 for anyone born in 1960 or later.

If you're still working at age 75, you can delay RMDs from your current employer's 401(k) until you retire.

Dissette presented another way to avoid RMDs without penalties if you're already retired: Execute Roth conversions from pre-tax accounts like IRAs and 401(k)s.

"There's no limit to how much you can divert from what I call taxable, toxic time bombs," Dissette explained.

Are Roth conversions a smart money move?

Roth conversions aren't for everyone. But if you plan to retire with an income equal to or higher than you had in your working years, and want to preserve that wealth for your heirs, it's something to consider, according to Dissette.

Overall, SECURE 2.0 changes can benefit retirees if they understand the ramifications, work with a financial advisor and make the right moves.

Related: Can caring for aging parents help my tax bill?

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This story was originally published April 17, 2026 at 8:03 AM.