The SECURE Act of 2022 (SECURE 2.0) brought about changes to both individual retirement accounts (IRAs) and employer-sponsored retirement plans. However, akin to prior similar legislation, not all provisions of SECURE 2.0 became effective immediately. One reason for this delay is the potential impact on federal taxes due to certain provisions. Lawmakers may opt to stagger the effective dates of certain provisions to offset tax benefits to individuals and businesses.  Below are key provisions of SECURE 2.0 that did not immediately take effect but are set to become effective in 2024.

Provisions Affecting IRAs:

– Indexed IRA Catch-Up Contributions: Individuals aged 50 and above who are eligible to contribute to Traditional and Roth IRAs can now make additional “catch-up” contributions. Previously fixed at $1,000 by statute, this contribution will now be indexed for inflation in $100 increments in the future.

– 529 Plan-to-Roth IRA Rollovers: Designated beneficiaries of 529 plans can roll over certain balances to a Roth IRA. However, amounts rolled over are subject to a lifetime limit of $35,000 and cannot exceed the lesser of the designated beneficiary’s earned income or the year’s Roth IRA contribution limit.

Provisions Affecting Employer Plans:

– Mid-Year Switch from SIMPLE IRA to Safe Harbor 401(k)/403(b) Plan: Employers sponsoring a SIMPLE IRA plan can now switch to a safe harbor 401(k) or 403(b) plan mid-year. Previously, such changes could only take effect in the next calendar year.

– Additional SIMPLE Plan Employer Contributions: Employers can make additional non-elective contributions for the year, not exceeding a uniform percentage of up to 10 percent of annual compensation, or $5,000 per employee, whichever is less.

– Larger SIMPLE Plan Employee Contributions: Certain employers may allow increased salary deferral limits for their employees.

Provisions Affecting Both IRAs and Employer Plans:

– Penalty-Free Distributions for Emergency Expenses: Individuals subject to the 10 percent early distribution penalty tax may take one penalty-free distribution per year for qualifying emergency events.

– Penalty-Free Distributions for Domestic Abuse: Domestic abuse victims may take penalty-free distributions up to the lesser of $10,000 or 50 percent of their IRA or vested employer plan benefit.

– Substantially Equal Periodic Payment Transferability: This is often referred to by it’s tax code number which is 72t.  Individuals receiving substantially equal periodic payments from an IRA or employer plan may transfer balances between IRAs and employer plans while remaining eligible for penalty-free distributions.


The IRS and DOL are expected to release additional guidance on various SECURE 2.0 provisions throughout the year. uDirect IRA Services will continue to monitor any new guidance as it becomes available. Reach out to us with all your self-directed questions at  Start your own self-directed account HERE.