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Writer's picturePatrick Murtha

SECURE ACT 2.0 Roth Changes



The SECURE Act made many changes to retirement accounts, including IRAs and 401Ks. One major area of change is with Roth accounts. If you aren’t familiar, these accounts are tax-advantaged after you make contributions. In other words, your contributions are after-tax, but your contributions and earnings grow tax-free, and your withdrawals are tax-free too.

Here’s how the SECURE 2.0 Act changes Roth accounts.


Elimination of RMDs for Roth 401Ks

Previously, Roth 401Ks were subject to the same Required Minimum Distributions as traditional 401Ks. This meant that at age 72, you must withdraw a certain amount of your retirement funds annually and pay applicable taxes.

However, with a Roth 401K, there aren’t any taxes to pay, so the RMDs weren’t necessary and won’t be required beginning in 2024.

The Addition of SIMPLE and SEP Roth IRAs

Before the SECURE Act 2.0 changes, taxpayers could only open a pre-tax retirement Roth account. However, now, taxpayers can open a SIMPLE or SEP IRA. While this isn’t a huge change, since SIMPLE and SEP IRA account holders could convert their traditional accounts to Roth accounts, it simplifies things.

Employer Contributions can go to a Roth Account

Employees with a Roth account can now receive employer contributions in their Roth accounts. Previously, the employer match could only go to a traditional retirement account. However, the contributed money must be added to the employee’s income for taxation purposes, and a vesting schedule cannot be tied to the contributions.

High-Wage Earner Catch-Up Contributions Must be in a Roth Account

Taxpayers over age 50 can take advantage of catch-up contributions to increase their retirement savings. However, with the new Act, taxpayers with income above $145,000 may only contribute catch-up contributions to a Roth account. In addition, this legislation only applies to catch-up contributions in a 401K or 403b, not IRAs.

529 Conversion to Roth Accounts


One last major change to Roth accounts is the ability to convert an unused 529 plan to a Roth retirement account. But there are rules.

  • You must have had the account for at least 15 years

  • The Roth account must be in the name of the beneficiary of the 529 plan

  • All funds must be in the 529 accounts for at least five years before conversion

  • You can move a maximum of $35,000 from a 529 to a Roth account in a person’s lifetime

Final Thoughts

The SECURE Act 2.0 is meant to help more people save for retirement, and now it’s making Roth accounts more accessible. With the changes it makes, more people may be willing to contribute to a Roth account, paying their taxes now and ensuring they have enough money in retirement without worrying about taxes.


We know the changes are confusing, and you might not understand how they affect you. However, the professionals at Henson & Murtha CPAs are happy to help you understand the changes and what you should do, especially if you’re thinking about Roth 401K accounts. Contact us today to discuss your situation and to learn more.

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