Passed in phases since 2019, the SECURE Act has profoundly transformed the way Americans can save for retirement.
In 2025, with the latest SECURE Act 2.0 measures taking effect, it’s essential to adapt your IRA strategy to take advantage of these new opportunities.
The retirement landscape in the United States is changing. And for Individual Retirement Account (IRA) holders, it’s time to take stock.
Major changes for RMDs and taxation
The first flagship reform of the SECURE Act 2.0, already well known, concerns the age of Required Minimum Distributions (RMDs), the mandatory withdrawals from retirement accounts.
Since 2023, this age has risen to 73 for people born between 1951 and 1959, and will increase to 75 from 2033 for those born in 1960 or later. This gives savers more time to let their investments grow in a tax-friendly environment.
Another measure is the reduction in penalties for forgetting to pay RMD. The rate has been reduced from 50% to 25%, or even 10% if the error is corrected in time. This is a step forward that limits the heavy tax consequences, particularly for senior citizens unfamiliar with IRA mistakes.
Finally, good news for Roth IRA holders. Since 2024, these accounts have no longer been subject to RMDs, making them even more attractive for those seeking to optimize their long-term tax situation.
Greater opportunities for financing IRAs
The other major new feature is the increased flexibility of contributions. The SECURE Act removed the age limit for funding a Traditional IRA, allowing Americans to continue saving beyond the age of 70, provided they still have a working income.
More and more people are postponing retirement or continuing to work part-time.
In addition, catch-up contributions for people aged 60 to 63 are raised to $11,250 (from the current $7,500 for those over 50), in occupational plans and certain IRAs such as SIMPLE IRAs.
This measure is clearly aimed at those looking to catch up on savings as they approach retirement.
It should also be noted that, for high-income earners (those earning over $145,000/year), these additional contributions will have to be made to a Roth account, starting in 2026.
Greater accessibility, more flexibility
The SECURE Act 2.0 also aims to adapt the rules to the economic realities of households. It introduces more exceptions for early withdrawals without penalty, including urgent medical expenses, natural disasters, victims of domestic violence, and long-term care expenses from 2026.
These are just some of the cases in which you can draw on your savings without incurring the classic 10% penalty before the age of 59 and a half.
In 2024, a long-awaited measure was introduced. The possibility of transferring up to $35,000 from a 529 plan (education savings) to a Roth IRA, under certain conditions. This makes it possible to intelligently reuse unused funds to prepare a child’s or grandchild’s retirement.
Retirement planning to be reviewed in the light of reform
The effects of the SECURE Act go far beyond the simple mechanics of RMDs or contribution limits.
The whole logic of retirement planning has been turned on its head. The possible postponement of mandatory withdrawals lengthens the accumulation phase, but it can also lead to massive withdrawals at a later date, potentially resulting in higher taxes. Active management of IRA funding, therefore, becomes strategic.
For example, it may be wise to make Qualified Charitable Distributions (QCDs) as early as age 70 and a half, to satisfy all or part of the RMD while supporting a charity, and reducing one’s taxable income.
In 2025, this ceiling increases to $108,000, with a new one-time option of $54,000 for certain charitable vehicles.
Social Security and IRAs: Thinking complementary
Another crucial aspect of retirement planning is the coordination between your IRAs and your Social Security benefits.
The trend towards deferring retirement (and therefore RMDs) offers an opportunity to defer the start of Social Security benefits too.
By deferring your Social Security claim until age 70, you can significantly increase your monthly payments.
This strategy, combined with targeted withdrawals from a Roth IRA (tax-free), can significantly improve your overall tax situation in retirement.
Towards a better-prepared but more complex retirement
The SECURE Act 2.0 is without doubt the most significant reform of the American retirement savings system in a generation.
It opens up many possibilities, but also makes the choices more complex. What combination between Traditional and Roth IRAs? When should withdrawals begin? Should you take advantage of the new rules to include your children or spouse in a wealth transfer strategy?
These are just some of the questions you need to ask yourself, sometimes with the help of a financial or tax advisor.
IRAs FAQs
An IRA (Individual Retirement Account) allows you to make tax-deferred investments to save money and provide financial security when you retire. There are different types of IRAs, the most common being a traditional one – in which contributions may be tax-deductible – and a Roth IRA, a personal savings plan where contributions are not tax deductible but earnings and withdrawals may be tax-free. When you add money to your IRA, this can be invested in a wide range of financial products, usually a portfolio based on bonds, stocks and mutual funds.
Yes. For conventional IRAs, one can get exposure to Gold by investing in Gold-focused securities, such as ETFs. In the case of a self-directed IRA (SDIRA), which offers the possibility of investing in alternative assets, Gold and precious metals are available. In such cases, the investment is based on holding physical Gold (or any other precious metals like Silver, Platinum or Palladium). When investing in a Gold IRA, you don’t keep the physical metal, but a custodian entity does.
They are different products, both designed to help individuals save for retirement. The 401(k) is sponsored by employers and is built by deducting contributions directly from the paycheck, which are usually matched by the employer. Decisions on investment are very limited. An IRA, meanwhile, is a plan that an individual opens with a financial institution and offers more investment options. Both systems are quite similar in terms of taxation as contributions are either made pre-tax or are tax-deductible. You don’t have to choose one or the other: even if you have a 401(k) plan, you may be able to put extra money aside in an IRA
The US Internal Revenue Service (IRS) doesn’t specifically give any requirements regarding minimum contributions to start and deposit in an IRA (it does, however, for conversions and withdrawals). Still, some brokers may require a minimum amount depending on the funds you would like to invest in. On the other hand, the IRS establishes a maximum amount that an individual can contribute to their IRA each year.
Investment volatility is an inherent risk to any portfolio, including an IRA. The more traditional IRAs – based on a portfolio made of stocks, bonds, or mutual funds – is subject to market fluctuations and can lead to potential losses over time. Having said that, IRAs are long-term investments (even over decades), and markets tend to rise beyond short-term corrections. Still, every investor should consider their risk tolerance and choose a portfolio that suits it. Stocks tend to be more volatile than bonds, and assets available in certain self-directed IRAs, such as precious metals or cryptocurrencies, can face extremely high volatility. Diversifying your IRA investments across asset classes, sectors and geographic regions is one way to protect it against market fluctuations that could threaten its health.
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