The SECURE 2.0 Act 2026: New Catch-Up Contributions, RMD Changes, and Inherited IRA Rules Explained
The SECURE 2.0 Act changes how older employees make retirement contributions, when retirees must begin required minimum distributions, and how many beneficiaries withdraw inherited retirement accounts. Several of its most consequential provisions apply in or are fully operational by 2026.
For employees, the key questions are whether they qualify for the larger age 60–63 catch-up contribution and whether their catch-up contributions must be made on a Roth basis. For retirees and beneficiaries, the main concerns are RMD deadlines, penalties, and the inherited IRA 10-year rule.
This article explains the federal rules in practical terms. It is general educational information, not individualized tax, financial, or legal advice.
What SECURE 2.0 Changes in 2026
SECURE 2.0 was signed into law on December 29, 2022, as part of the Consolidated Appropriations Act, 2023. The legislation contains more than 90 retirement-related provisions that take effect over multiple years.
Three areas are particularly important in 2026:
- Enhanced catch-up contributions: Employees ages 60 through 63 may qualify for a larger workplace-plan catch-up limit.
- Mandatory Roth catch-ups: Certain higher-paid employees must make catch-up contributions with after-tax Roth dollars.
- Distribution rules: Revised RMD ages, lower missed-RMD penalties, and inherited-account requirements affect retirees and beneficiaries.
Contribution limits and income thresholds can be adjusted annually for inflation. Before changing payroll elections, verify the applicable 2026 amount in the latest IRS cost-of-living announcement and in the employer plan’s materials.
Enhanced Catch-Up Contributions for Ages 60 to 63
Employees who will be ages 60, 61, 62, or 63 by the end of the calendar year may be allowed to make a larger catch-up contribution to a 401(k), 403(b), governmental 457(b), or another qualifying workplace plan.
The enhanced limit is generally the greater of:
- $10,000, adjusted for inflation; or
- 150% of the applicable regular catch-up amount specified under the law.
For reference, the enhanced catch-up limit was $11,250 in 2025. Employees should confirm the 2026 amount through the IRS annual contribution-limit announcement, their plan administrator, or their payroll provider. The plan also must support the enhanced contribution.
How the age rule works
Eligibility is based on the age an employee reaches during the calendar year. An employee who turns 60 at any point in 2026 can generally use the enhanced limit for 2026 if the plan permits it. Someone who turns 64 during 2026 generally returns to the standard age-50 catch-up limit for that year.
Consider an employee who turns 62 in 2026. That employee can contribute up to the regular workplace-plan deferral limit and may then contribute up to the special age 60–63 catch-up limit. Employer matching contributions do not reduce the employee’s elective-deferral limit, although a separate overall plan contribution limit applies.
The enhanced limit does not apply to IRAs
The age 60–63 provision is a workplace-plan rule. It does not increase the catch-up contribution available for a traditional IRA or Roth IRA.
IRA owners age 50 or older may still use the regular IRA catch-up contribution, subject to the annual IRA contribution limit, earned-income requirements, and Roth IRA income restrictions. The IRA catch-up amount is now eligible for inflation adjustments, so it also should be checked annually.
The 2026 Roth Catch-Up Rule for Higher Earners
Beginning in 2026, an employee whose prior-year wages exceed the applicable threshold must generally make workplace-plan catch-up contributions as Roth contributions. The statutory starting threshold is more than $145,000 in prior-year wages, but that amount is indexed for inflation.
The test generally uses Social Security wages under Internal Revenue Code Section 3121(a)—often described as FICA wages—from the employer sponsoring the plan. It is not simply adjusted gross income or total household income. Employees should use the indexed threshold applicable for 2026 rather than assuming the original $145,000 amount still controls.
This requirement applies to catch-up contributions in affected employer plans. It does not require traditional or Roth IRA catch-up contributions to receive Roth treatment.
Traditional versus Roth catch-up treatment
| Feature | Pre-tax catch-up | Roth catch-up |
|---|---|---|
| Current-year tax treatment | Generally reduces current taxable wages for federal income-tax purposes | No upfront federal income-tax deduction |
| Growth | Tax-deferred | Potentially tax-free |
| Qualified withdrawal | Generally taxable as ordinary income | Generally tax-free if Roth qualification rules are met |
Only the catch-up portion is forced into Roth treatment under this rule. An affected employee may still be able to make regular elective deferrals on a pre-tax basis if the plan offers that option.
What if the plan has no Roth option?
A plan that permits catch-up contributions but does not support designated Roth contributions may need to be amended. Without an available Roth feature, employees above the indexed wage threshold may be unable to make catch-up contributions until the plan supports compliant Roth processing.
Employers also need payroll systems capable of identifying affected employees and treating excess deferrals as Roth catch-up contributions when the plan uses a deemed-Roth election. Under deemed-Roth processing, the plan automatically classifies an affected employee’s catch-up dollars as Roth without requiring a separate election for each contribution.
2026 payroll checklist
- Review 2025 FICA wages from the employer sponsoring the plan.
- Compare those wages with the indexed threshold applicable for 2026.
- Confirm that the plan document allows designated Roth contributions.
- Check whether an existing Roth election is required or deemed-Roth processing will apply.
- Verify that payroll will switch the catch-up portion to Roth after the regular deferral limit is reached.
- Review the first pay statements showing catch-up contributions for correct tax treatment.
RMD Ages, Deadlines, and Penalties in 2026
SECURE 2.0 raised the age at which many retirement-account owners must begin required minimum distributions. The applicable age depends on birth year.
| Birth year | General RMD starting age |
|---|---|
| Before 1951 | Earlier rules generally already required distributions; SECURE 2.0 does not provide a new delayed starting age |
| 1951 through 1959 | 73 |
| 1960 or later | 75 |
For example, a person born in 1953 turns 73 in 2026 and generally has a 2026 RMD. The amount is usually calculated by dividing the account’s December 31, 2025 balance by the applicable IRS life-expectancy factor.
First-RMD and later deadlines
The first RMD can generally be taken during the year the account owner reaches the applicable starting age or delayed until April 1 of the following year. Delaying does not postpone the second RMD: that distribution remains due by December 31 of the following year.
Someone with a first RMD for 2026 could therefore:
- Take the first distribution by December 31, 2026; or
- Delay it until April 1, 2027, and then take the 2027 RMD by December 31, 2027.
Taking two taxable RMDs in 2027 could increase adjusted gross income, move part of the taxpayer’s income into a higher bracket, increase taxation of Social Security benefits, or affect future income-related Medicare premiums.
A still-working exception may delay RMDs from a current employer’s qualifying plan if the plan permits it and the employee is not a 5% owner. This exception generally does not apply to traditional IRAs or plans maintained by former employers.
Penalty for a missed RMD
The federal excise tax on an RMD shortfall is generally 25% of the amount that should have been withdrawn. It may fall to 10% when the shortfall is corrected within the applicable correction window and the related requirements are satisfied.
Account owners should withdraw the shortfall promptly and determine whether Form 5329 is required. The IRS may waive the tax when the failure resulted from reasonable error and reasonable steps are being taken to correct it, but relief is not automatic.
No lifetime RMDs from designated Roth plan accounts
Beginning in 2024, designated Roth accounts in 401(k) and 403(b) plans are no longer subject to lifetime RMDs for the original owner. This aligns their lifetime treatment more closely with Roth IRAs. Beneficiaries who inherit these accounts may still face inherited-account distribution deadlines.
Inherited IRA Rules Under the 10-Year Rule
The original SECURE Act eliminated the lifetime “stretch IRA” for many non-spouse beneficiaries of people who died after 2019. Most non-eligible designated beneficiaries must empty an inherited account by December 31 of the tenth calendar year after the owner’s death.
If an IRA owner died in 2026, for example, a beneficiary subject to the 10-year rule generally must fully distribute the account by December 31, 2036.
Did the owner die before or after the required beginning date?
The original owner’s RMD status affects whether withdrawals are required during years one through nine:
- Death before the required beginning date: A beneficiary subject to the 10-year rule generally does not have to take annual distributions in years one through nine, but the entire balance must be withdrawn by the end of year 10.
- Death on or after the required beginning date: A beneficiary subject to the 10-year rule generally must take annual life-expectancy-based distributions in years one through nine and empty the account by the end of year 10.
If the owner had an RMD due for the year of death and had not completed it, the beneficiary may also need to take the remaining year-of-death RMD.
Who is an eligible designated beneficiary?
Certain beneficiaries may qualify for life-expectancy distributions instead of immediately entering the standard 10-year framework. Eligible designated beneficiaries generally include:
- A surviving spouse;
- The account owner’s minor child, until the child reaches the applicable age of majority;
- A disabled beneficiary who meets the tax-law definition;
- A chronically ill beneficiary who meets the applicable requirements; and
- An individual who is not more than 10 years younger than the account owner.
Special documentation and transition rules apply. For example, the owner’s minor child generally becomes subject to a 10-year deadline after reaching the applicable age. Trust beneficiaries require separate analysis because the result depends partly on the trust’s terms and whether it qualifies as a see-through trust.
Inherited traditional IRA versus inherited Roth IRA
Withdrawals of pre-tax money from an inherited traditional IRA are generally taxable as ordinary income. The 10% additional tax for early distributions generally does not apply to a properly titled inherited IRA, even when the beneficiary is younger than 59½.
An inherited Roth IRA is still subject to beneficiary distribution rules, including the applicable 10-year deadline. However, the original Roth IRA owner is treated as dying before a required beginning date because Roth IRA owners do not have lifetime RMDs. A beneficiary under the 10-year rule can therefore generally wait until year 10 to distribute the account.
Inherited Roth IRA withdrawals are generally tax-free if the original owner’s Roth IRA satisfied the five-year holding requirement. If it did not, the taxation of earnings requires additional attention. The beneficiary receives credit for the original owner’s holding period.
Spousal Inheritance, Roth Accounts, and Tax Planning
A surviving spouse usually has more options than another beneficiary. The spouse may be able to keep the account as an inherited IRA or elect to treat the IRA as the spouse’s own.
Keeping the account inherited
An inherited IRA can provide useful access when the surviving spouse is younger than 59½. Distributions from a properly maintained inherited IRA generally avoid the 10% early-distribution tax. RMD timing depends on the deceased spouse’s age, date of death, and other elections.
Treating the IRA as the spouse’s own
Making the IRA the surviving spouse’s own may delay RMDs until the survivor reaches the applicable starting age. It also may allow new contributions when the spouse has eligible compensation and otherwise qualifies.
The tradeoff is that withdrawals from the spouse’s own IRA before age 59½ may be subject to the 10% additional tax unless an exception applies. A spouse who needs immediate access may therefore prefer inherited status initially and consider an own-IRA election later. Some elections are difficult or impossible to reverse, so the sequence matters.
Managing the tax impact of inherited withdrawals
Large inherited traditional IRA distributions can increase taxable income and potentially affect:
- Federal and state income-tax brackets;
- Income-related Medicare Part B and Part D premiums;
- Taxation of Social Security benefits;
- Eligibility for deductions, credits, or health-insurance subsidies; and
- Net investment income tax exposure.
Suppose a beneficiary inherits a $500,000 traditional IRA and is permitted to choose the timing of withdrawals over 10 years. Waiting until the final year could produce a large taxable distribution. Taking planned withdrawals across several years may reduce bracket concentration, although investment results, annual RMD requirements, and the beneficiary’s other income must be considered.
Inherited Roth distributions may be tax-free when the qualification requirements are met, making it potentially valuable to preserve Roth assets until later in the 10-year period. The account still must be emptied by the applicable deadline.
A related provision: 529-to-Roth IRA rollovers
SECURE 2.0 also permits certain direct rollovers from a beneficiary’s 529 education account to that beneficiary’s Roth IRA. These transfers are subject to a $35,000 lifetime limit, annual Roth IRA contribution limits, earned-income requirements, a 15-year 529 account-age requirement, and restrictions involving recent contributions and earnings. The transfer is not an unlimited way to move unused education savings into a Roth IRA.
2026 SECURE 2.0 Action Checklist
- Confirm contribution limits. Check the current 2026 regular workplace-plan limit, standard catch-up limit, age 60–63 enhanced limit, IRA limit, and IRA catch-up amount using the latest IRS guidance.
- Check prior-year wages. Employees age 50 or older should compare their 2025 FICA wages from the plan sponsor with the indexed Roth catch-up threshold.
- Verify Roth support. Ask whether the employer plan and payroll system support Roth catch-ups and deemed-Roth processing.
- Calculate RMDs correctly. Use the applicable birth-year rule, prior December 31 account balance, and correct IRS life-expectancy table.
- Document inherited-account facts. Record the owner’s date of death, required beginning date, year-of-death RMD status, beneficiary category, and final 10-year deadline.
- Review beneficiary designations. Check traditional IRAs, Roth IRAs, 401(k)s, 403(b)s, and other retirement plans. Account beneficiary forms generally control who receives the assets.
- Plan taxable withdrawals. Model how inherited traditional IRA distributions could affect tax brackets and Medicare premiums over multiple years.
- Get advice before an irreversible election. Consult a qualified tax or financial professional before choosing a spousal rollover, inherited-account distribution schedule, Roth conversion, or trust strategy.
What to Do Next
Start with the rule most likely to affect your next deadline. Employees should review payroll elections before catch-up contributions begin. Retirees should identify their RMD starting year and decide whether delaying a first RMD would create an undesirable two-distribution year. Beneficiaries should establish the account owner’s RMD status before taking—or postponing—an inherited IRA withdrawal.
SECURE 2.0 creates planning opportunities, but it also makes dates, account types, wages, and beneficiary classifications more important. Confirm current IRS limits and plan-specific procedures before acting.