SECURE 2.0 Act — Comprehensive Provisions for CFP Exam

Exam: CFP — Certified Financial Planner Chapter: Ch06 — Retirement Planning Law: SECURE 2.0 Act of 2022 (signed December 29, 2022); provisions phased in 2023–2033 Last Updated: 2026-06-26

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Key Takeaways

• SECURE 2.0 contains 90+ provisions affecting retirement accounts; the CFP exam tests the most impactful ones.
• RMD age is now 73 (effective January 1, 2023); rises to 75 in 2033.
• Ages 60–63 have a "super catch-up" for employer plans: $11,250 (2025).
• 529-to-Roth IRA rollovers are now permitted — up to $35,000 lifetime.
• Emergency expense distributions (up to $1,000/year) are penalty-free.
• Employers may match student loan repayments as if they were retirement deferrals.
• Distinguish SECURE 1.0 (2019) from SECURE 2.0 (2022) — they are separate laws.

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SECURE 1.0 vs. SECURE 2.0 — Key Distinction

| Provision | SECURE 1.0 (2019) | SECURE 2.0 (2022) | |---|---|---| | RMD age | Changed from 70½ to 72 | Changed from 72 to 73 (then 75 in 2033) | | Post-age-70½ IRA contributions | Allowed inherited IRAs differently | Further changes to inherited IRA rules | | Part-time worker eligibility | 3 consecutive years, 500 hours | Reduced to 2 consecutive years, 500 hours (effective 2025) |

CFP Exam Tip: Do not confuse the two laws. If a question says "RMD age 72" — that was SECURE 1.0. The current rule (since Jan 1, 2023) is age 73.

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Required Minimum Distributions (RMDs)

RMD Starting Age

| Law | RMD Age | Effective | |---|---|---| | Pre-SECURE 1.0 | 70½ | Before 2020 | | SECURE 1.0 | 72 | Jan 1, 2020 | | SECURE 2.0 | 73 | Jan 1, 2023 | | SECURE 2.0 (future) | 75 | Jan 1, 2033 |

Who is affected by age 73: Individuals who turned 72 after December 31, 2022. If a client turned 72 in 2022 or before, their RMD age remains 72.

Exam Tip: For the CFP exam, the current RMD age is 73. Know the transition rule and the 2033 increase to 75.

Roth Accounts — No RMD During Lifetime

• Roth IRA: No RMD during the owner's lifetime (unchanged from prior law)
• Roth 401(k) / Roth 403(b): Beginning in 2024, no RMD during the owner's lifetime (previously required RMDs during lifetime)
• This makes Roth employer accounts equivalent to Roth IRAs for RMD purposes — a major planning change

CFP Planning Context: Roth 401(k)s are now superior to traditional 401(k)s for clients who do not need distributions, because Roth accounts can be left to grow tax-free for beneficiaries.

Reduced Penalty for Missed RMDs

• Old penalty: 50% excise tax on the shortfall
• SECURE 2.0: 25% (further reduced to 10% if corrected within 2 years under a new correction window)

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Contribution Changes

Super Catch-Up Contributions (Ages 60–63)

• Applies to 401(k), 403(b), and governmental 457(b) plans
• 2025: $11,250 (150% × $7,500 regular catch-up)
• Regular catch-up for ages 50–59 and 64+: $7,500
• Age 64+ reverts to $7,500 (not super catch-up)

Summary of 2025 contribution limits:

| Age | 401(k) Deferral | Catch-Up | Total | |---|---|---|---| | Under 50 | $23,500 | $0 | $23,500 | | 50–59 | $23,500 | $7,500 | $31,000 | | 60–63 | $23,500 | $11,250 | $34,750 | | 64+ | $23,500 | $7,500 | $31,000 |

Exam Tip: The super catch-up only applies to ages 60, 61, 62, and 63 — not 64 or above. This is a commonly tested detail.

IRA Catch-Up — Now Inflation-Indexed

• IRA catch-up was fixed at $1,000 for many years
• SECURE 2.0: Now indexed to inflation starting 2024
• For 2025: Still $1,000 (first inflation adjustment not yet triggered)
• The $1,000 figure is no longer a permanent cap — will increase in future years

Roth Catch-Up Requirement for High Earners (Effective 2026)

• Employees age 50+ earning over $145,000 in the prior calendar year must make catch-up contributions as Roth (after-tax)
• Delayed from original 2024 effective date to January 1, 2026
• Applies to 401(k) and 403(b) plans

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529-to-Roth IRA Rollovers (Effective January 1, 2024)

This provision allows unused 529 funds to be rolled into the beneficiary's Roth IRA.

Conditions (All Must Be Met)

1. 529 account must have been open for at least 15 years 2. Rollover goes to a Roth IRA in the name of the beneficiary (not account owner) 3. Lifetime limit: $35,000 per beneficiary 4. Subject to the annual Roth IRA contribution limit ($7,000 for 2025) 5. Contributions made within the last 5 years (and earnings) are ineligible for rollover 6. Beneficiary must have earned income at least equal to the rollover amount

CFP Planning Context: This provision addresses the "overfunded 529" problem — if a child does not use all the 529 funds for education, the excess can now be repurposed for retirement savings rather than triggering a 10% penalty plus income tax on earnings.

Exam Tip: Exam questions will test whether specific facts satisfy all conditions. Pay particular attention to the 15-year account requirement and the 5-year lookback on contributions.

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Emergency Expense Distributions (Effective January 1, 2024)

• Allows penalty-free withdrawals for unforeseeable or immediate financial needs
• Maximum: $1,000 per year from employer plans or IRAs
• No 10% early distribution penalty (even if under age 59½)
• Taxable as ordinary income
• Repayment period: 3 years; if not repaid, no additional emergency distributions during that period
• Employer plans may, but are not required to, permit this feature

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Student Loan Employer Match (Effective January 1, 2024)

• Employers may treat employee qualified student loan repayments (QSLPs) as if they were elective deferrals for matching purposes
• The employer contributes to the retirement account on behalf of the employee who is paying down student debt instead of deferring to the plan
• Match must satisfy the same rules as regular matching contributions

CFP Planning Context: A client with $50,000 in student loans who cannot afford to defer into their 401(k) can still earn employer matching contributions by making student loan payments — helping them save for retirement while reducing debt.

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SIMPLE IRA Enhancements

• 2025 contribution limit: $16,500 (up from $16,000 in 2024)
• SECURE 2.0 allows employers to increase limits by 10% for small employers (≤25 employees)
• Employers now have additional flexibility in matching formulas

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Automatic Enrollment Requirement (Effective 2025)

• Plans established after December 29, 2022 generally must include automatic enrollment
• Default deferral: at least 3%, escalating annually up to at least 10%
• Employees may opt out
• Exceptions: small employers (≤10 employees), new businesses (≤3 years old), governmental plans, SIMPLE plans

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Part-Time Worker Eligibility (Effective 2025)

• SECURE 1.0: Part-time workers eligible after 3 consecutive years with 500+ hours each year
• SECURE 2.0: Reduced to 2 consecutive years with 500+ hours each year

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Inherited IRA Summary (SECURE 1.0 + 2.0 Combined)

| Beneficiary Type | Distribution Rule | |---|---| | Surviving spouse | Stretch (treat as own IRA); RMDs based on own age | | Minor child of owner | Stretch until age of majority; then 10-year rule | | Chronically ill or disabled individual | Stretch over lifetime | | Individual not more than 10 years younger than owner | Stretch over lifetime | | All other non-spouse beneficiaries | 10-year rule: full distribution by end of year 10 after owner's death |

Exam Tip: The 10-year rule for most non-spouse beneficiaries means no RMDs are required during years 1–9, but the account must be fully distributed by the end of Year 10. Some IRS guidance has suggested annual RMDs may be required in certain cases — confirm against current IRS guidance for the exam window.

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Exam Tip Summary

| Topic | Key Fact | |---|---| | RMD age | 73 now; 75 in 2033 | | Super catch-up (60–63) | $11,250 (2025); age 64+ reverts to $7,500 | | IRA catch-up | $1,000 (inflation-indexed going forward) | | Roth 401(k) RMD | No lifetime RMD (effective 2024) | | 529-to-Roth | 15-yr account; $35K lifetime; annual IRA limit applies | | Emergency distribution | $1,000/year; no penalty; repay in 3 years | | Student loan match | Employer matches loan payments as if deferrals | | Missed RMD penalty | 25% (10% if corrected timely) |

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Tags: #CFP #Ch06 #RetirementPlanning #SECURE2 #RMD #SuperCatchUp #529ToRoth #EmergencyDistribution #StudentLoanMatch #AutoEnrollment #InheritedIRA