Direct answer: The SECURE 2.0 Act (signed December 2022) made the most extensive changes to 401(k) and retirement account rules in decades. Key changes effective 2024 and beyond: the RMD starting age rose to 73 (and will rise to 75 in 2033), catch-up contribution limits for ages 60-63 will increase to $10,000 starting 2025, auto-enrollment for new plans becomes mandatory starting 2025, and Roth treatment of catch-up contributions for high earners takes effect in 2026.
What Changed: 401(k) Contribution Limits and Rules
Key Takeaways
- 2024 401(k) deferral limit: $23,000 per person; with the standard catch-up for age 50+, the limit is $30,500. These limits increase annually with inflation.
- SECURE 2.0 created a new 'super catch-up' for ages 60-63, allowing an additional contribution of the greater of $10,000 or 150% of the standard catch-up amount, effective 2025.
- Starting 2026, catch-up contributions for employees earning over $145,000 (adjusted for inflation) must be made as Roth contributions, eliminating the pre-tax catch-up option for high earners.
- New 401(k) and 403(b) plans must automatically enroll eligible employees at a contribution rate of 3% to 10% starting in 2025; this mandatory auto-enrollment applies only to new plans, not existing ones.
- The RMD starting age is 73 for those reaching age 72 after December 31, 2022; it will rise to 75 for those reaching age 74 after December 31, 2032.
2024 to 2025 Contribution Limit Changes
The 2024 annual 401(k) elective deferral limit is $23,000 (up from $22,500 in 2023). The standard catch-up contribution for age 50 and older remains $7,500, bringing the total age-50+ limit to $30,500. Total contributions (employee plus employer) cannot exceed $69,000 in 2024 (or $76,500 with catch-up). The IRS typically announces inflation-adjusted limits for the following year in October or November; check IRS.gov/retirement-plans/plan-participant-employee/retirement-topics-contributions for current-year limits before making year-end contribution decisions.
SECURE 2.0: RMD Age Changes
Before the SECURE Act (2019), RMDs began at age 70.5. The original SECURE Act pushed this to 72. SECURE 2.0 (2022) pushed it to 73 for those who reach age 72 after December 31, 2022. A further change raises the RMD age to 75 for those who reach age 74 after December 31, 2032. For Roth 401(k) accounts, SECURE 2.0 eliminated the requirement to take RMDs from Roth 401(k)s starting in 2024 (aligning Roth 401(k)s with Roth IRAs, which have never had lifetime RMDs). This change makes Roth 401(k) conversions more attractive for high earners planning estate transfers.
SECURE 2.0: Mandatory Auto-Enrollment
New 401(k) and 403(b) plans established after December 29, 2022 must automatically enroll eligible employees at a default contribution rate of at least 3%, escalating annually by 1 percentage point to a minimum of 10% and a maximum of 15%. Employees can opt out or adjust their contribution rate. Plans established before December 29, 2022, are not required to adopt auto-enrollment under this provision. Small businesses with 10 or fewer employees and businesses in operation for fewer than 3 years are exempt. Research on auto-enrollment consistently shows it significantly increases retirement plan participation rates without reducing voluntary contributions.
What Has Not Changed: The Basics Still Apply
Despite SECURE 2.0, the fundamental structure of 401(k) tax treatment is unchanged: traditional 401(k) contributions are pre-tax (reduce current taxable income, grow tax-deferred, taxed as ordinary income at withdrawal), Roth 401(k) contributions are after-tax (no current deduction, grow tax-free, qualified withdrawals tax-free), employer matching contributions are always taxable at withdrawal regardless of whether the employee contribution was traditional or Roth, and the 10% early withdrawal penalty applies to distributions before age 59.5 with specific exceptions.
Frequently Asked Questions
Where can I find the current 401(k) contribution limits?
The IRS updates contribution limits annually, typically in October. The authoritative source is IRS Publication 560 and the IRS Retirement Topics page at irs.gov/retirement-plans/plan-participant-employee/retirement-topics-contributions. Your 401(k) plan administrator and payroll system should also reflect the current limits.
How does SECURE 2.0 affect inherited IRAs?
SECURE 2.0 made several changes to inherited IRA rules, building on the original SECURE Act's 10-year rule. The IRS has issued guidance clarifying that most non-spouse beneficiaries subject to the 10-year rule must also take annual RMDs in years 1 through 9 if the original owner died after their required beginning date. This is a complex area; consult a tax professional for inherited IRA planning.
What is the 2024 IRA contribution limit and income phase-out for Roth IRA deductibility?
For 2024, the IRA contribution limit is $7,000 per person ($8,000 for age 50+). Roth IRA contributions phase out at $146,000 to $161,000 MAGI for single filers and $230,000 to $240,000 for married filing jointly. Traditional IRA deductibility phases out at different income levels depending on whether the filer or their spouse has a workplace retirement plan. Current year figures are always at IRS.gov.