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2025 SECURE Act 2.0 Requirements
In December 2022, the SECURE Act 2.0 was passed which modified many rules impacting traditional IRAs, Roth IRAs, 401(k)s, 403(b)s, and 457s. The primary objective of this act is to encourage more workers to save for retirement. However, due to the many and complex nature of these modifications, it is important that you understand the key points and requirements of the law.
Below are some of the notable changes that go into effect in 2025 which may affect your payroll. Please consult with your TPA or Retirement Plan Administrator for the full list of changes and more information on how these new rules affect you.
Catch-Up Contributions
Starting in 2025, individuals aged 60 to 63 will be able to increase their catch-up contributions into retirement savings accounts (401(k), 403(b), 457), contributing the greater of $10,000 or 150% of the 2024 catch-up contribution limit, adjusted for inflation.
Simple IRA Changes
Starting in 2025, individuals aged 60 to 63 with Simple IRAs will be allowed to make catch-up contributions of the greater of $5,000 or 150% of the age-50 catch-up limit.
Automatic 401(k) Enrollment
Starting in 2025, automatic enrollment in 401(k) or 403(b) plans established after Dec 28th 2022 will be required for new employees, with initial contribution rates between 3-10%. Contributions will increase by 1% annually until reaching at least 10%, but not exceeding 15%. Although automatic enrollment is mandated for these plans, employees can opt out or adjust their contribution rate.
IRS - 2025 Changes to Retirement
SHRM - SECURE Act 2.0 Changes
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