SECURE 2.0 and the Solo 401(k):
What Changed in 2025 and 2026

The Law That Keeps Delivering

When President Biden signed the SECURE 2.0 Act into law on December 29, 2022, most of the immediate commentary focused on its headline changes: the increase in the required minimum distribution age and the creation of enhanced catch-up contributions for older workers. What received less attention was the law's deliberate staging — dozens of provisions were written with delayed effective dates spread across 2023, 2024, 2025, and 2026, with some reaching as far as 2033.

That legislative structure means the SECURE 2.0 Act is not an event that happened in 2022. It is a multi-year transformation of retirement plan law that has continued to reshape the rules for Solo 401(k) owners with each passing year. As of 2026, the law's most operationally significant provisions are now fully in effect — and several of them carry real consequences for self-employed individuals who have not yet prepared.

This article covers every SECURE 2.0 provision that matters for Solo 401(k) plan owners, organized by when it took effect, with a focus on what has changed in 2025 and 2026 and what it means in practice.

Quick Reference: SECURE 2.0 Provisions by Year

What Changed in 2023 — The Foundational Shifts

Before examining the 2025 and 2026 changes in detail, it is worth briefly recapping the earlier SECURE 2.0 provisions already in effect, since they form the foundation upon which the newer rules build.

RMD Age Increased to 73

Effective January 1, 2023, the age at which Solo 401(k) participants must begin taking Required Minimum Distributions increased from 72 to 73. This applied to any individual who turned 72 in 2023 or later. Those who had already reached age 72 before January 1, 2023 were not affected and continued under the prior rules.

The RMD age will increase again — to 75 — beginning in 2033, for individuals born in 1960 or later. For those born in 1959, there is pending IRS guidance on whether the applicable age is 73 or 75; conservative planning assumes 73.

Roth 401(k) Subaccounts Exempt from RMDs

Prior to SECURE 2.0, Roth accounts held inside a 401(k) plan were subject to RMD requirements — unlike Roth IRAs, which have never required distributions during the owner's lifetime. Effective for taxable years beginning in 2024, Roth accounts within employer-sponsored 401(k) plans — including Solo 401(k) Roth subaccounts — are no longer subject to RMDs during the participant's lifetime. This aligns the treatment of in-plan Roth accounts with Roth IRAs and eliminates a long-standing planning disadvantage.

The practical implication for Solo 401(k) owners: contributions directed to a Roth subaccount can now compound indefinitely, without being forced out via RMD. This makes the Roth Solo 401(k) — and particularly the Mega Backdoor Roth strategy — even more valuable as a long-term wealth accumulation vehicle.

RMD Penalty Reduced

Effective 2023, the excise tax for failing to take a required minimum distribution was reduced from 50% to 25% of the amount not withdrawn. It is further reduced to 10% if the shortfall is corrected within two years by withdrawing the missed amount and filing a corrected return. While the penalty remains significant, the reduction meaningfully lowers the cost of inadvertent compliance errors.

Roth Employer Contributions Permitted

SECURE 2.0 authorized employers — including Solo 401(k) participants — to designate employer contributions (profit-sharing) as Roth contributions, subject to the plan document allowing it. This is an optional plan feature. When elected, the Roth employer contribution is included in the participant's gross income for the year it is made, is immediately vested, and held in a designated Roth account. Availability depends on the plan document and, in practice, many custodians have been slow to implement this feature. Mrs401k.com can structure plan documents to include this provision upon request.

What Changed in 2025 — The Two Big Ones

Enhanced Catch-Up Contributions for Ages 60–63

This is the single most significant SECURE 2.0 change for Solo 401(k) owners in the 60-to-63 age bracket, and it took effect January 1, 2025.

Under prior law, all plan participants age 50 and older were entitled to the same catch-up contribution limit — $7,500 in 2025, $8,000 in 2026. SECURE 2.0 created a new, higher catch-up tier specifically for participants who turn 60, 61, 62, or 63 during the calendar year. The enhanced limit is the greater of $10,000 or 150% of the standard catch-up limit, indexed for inflation. For both 2025 and 2026, that amount is $11,250.

In concrete terms, the 2026 contribution limits by age tier are:

There is an important nuance regarding eligibility: the enhanced catch-up applies to the participant's age at the end of the calendar year. A participant who turns 60 on December 31 of a given year is eligible for the super catch-up for that entire year. Conversely, a participant who turns 64 on December 31 reverts to the standard $8,000 catch-up — the enhanced limit applies only through age 63.

This provision is optional for plan sponsors to adopt, but most Solo 401(k) plans administered by established providers — including Mrs401k.com — support it. Verify with your plan administrator that your plan document has been updated to reflect this provision if you are in the 60–63 age bracket.

Long-Term Part-Time Employee Rule — Reduced to Two Years

The original SECURE Act of 2019 created a new category of 401(k) eligibility for long-term part-time employees — those who work at least 500 hours per year for three consecutive years. SECURE 2.0 reduced the qualifying period from three years to two years, effective January 1, 2025.

For pure Solo 401(k) owners with no employees, this provision is irrelevant — the Solo 401(k) is available only to owner-only businesses, and the long-term part-time rules apply to plans with eligible employees. However, for Solo 401(k) owners who have or are considering hiring part-time workers, this rule is a material compliance consideration: a part-time employee who works 500+ hours per year for two consecutive years (beginning with service years after 2022) must be allowed to make elective deferrals to the 401(k) plan — which would convert the plan from a Solo 401(k) to a standard ERISA 401(k).

The practical implication: if you are relying on the "no employees" eligibility basis for your Solo 401(k), be vigilant about part-time employee hours. Once a part-time employee hits the two-year, 500-hour threshold, your plan may need to be expanded to include them.

Automatic Enrollment Requirement for New Plans

SECURE 2.0 requires that new 401(k) plans established on or after December 29, 2022 (the date of enactment) include automatic enrollment beginning January 1, 2025. The default deferral rate must be between 3% and 10% of compensation, with automatic annual escalation of 1% until the rate reaches at least 10% (but not more than 15%).

Sole proprietors and owner-only businesses operating a Solo 401(k) are generally exempt from the automatic enrollment requirement, as it is designed for employer-employee plans with non-owner participants. ERISA plans with employees — including plans administered by 401kAdministrators.com for employers with employees — must comply if established after December 29, 2022.

What Changed in 2026 — The New Requirements

Mandatory Roth Treatment for High-Earner Catch-Up Contributions

This is the most operationally complex SECURE 2.0 provision affecting Solo 401(k) owners, and it became effective January 1, 2026 — though the IRS has established a good-faith transition period through the end of 2026, with strict enforcement beginning January 1, 2027.

The rule: Plan participants age 50 and older who earned more than $150,000 in FICA wages from the plan-sponsoring employer in the prior calendar year (2025, for 2026 catch-up contributions) must make any catch-up contributions as designated Roth contributions — i.e., on an after-tax basis. Pre-tax catch-up contributions are no longer permitted for these individuals.

The $150,000 threshold is indexed for inflation in $5,000 increments. It was $145,000 as written in the original statute and increased to $150,000 for 2026 due to cost-of-living adjustment.

Who Does This Affect — and Who Is Exempt?

The critical phrase in the rule is "FICA wages from the employer sponsoring the plan." FICA wages are W-2 wages subject to Social Security and Medicare tax — they are reported in Box 3 of Form W-2. The rule's impact depends entirely on how the business owner's compensation is structured:

• Sole proprietors, single-member LLC owners, and partners who pay themselves through draws or guaranteed payments — not W-2 wages — generally do not receive FICA wages from "the employer sponsoring the plan" in the SECURE 2.0 sense. The mandatory Roth catch-up requirement therefore does not apply to most sole proprietors, regardless of their income level. Self-employment tax is assessed on net earnings, but it is not "FICA wages" in the Box 3 sense.
• S-Corp and C-Corp owners who pay themselves a W-2 salary from the corporation are subject to the rule if their prior-year Box 3 FICA wages exceeded $150,000. For a high-earning S-Corp owner, this means catch-up contributions in 2026 — whether the standard $8,000 or the enhanced $11,250 for ages 60–63 — must be made as Roth contributions, not pre-tax.

The Transition Period for 2026

The IRS finalized regulations on catch-up contributions in September 2025, establishing that plans and employers may rely on reasonable good-faith interpretations of the Roth catch-up requirement throughout 2026. Strict compliance with the final regulations begins January 1, 2027. However, the statutory requirement itself applies as of January 1, 2026 — so affected S-Corp and C-Corp owners should be directing catch-up contributions to Roth accounts now, even during the transition period.

Updated 2026 Contribution Limits

The IRS announced updated contribution limits for 2026 in Notice 2025-67, effective January 1, 2026. These increases are a combination of annual cost-of-living adjustments and SECURE 2.0 provisions:

Plan Document Amendment Deadline — December 31, 2026

This is the compliance deadline that affects every Solo 401(k) plan owner regardless of their age, income, or business structure.

SECURE 2.0 required plans to operationally comply with its provisions as they took effect — meaning plan administrators were required to administer the plan in accordance with the new rules starting on their effective dates. The formal written plan amendment, however, was given a delayed deadline. For most qualified retirement plans (including Solo 401(k) plans), that deadline is December 31, 2026.

What this means in practice: if your Solo 401(k) plan document has not been updated to reflect SECURE 2.0 provisions — including the enhanced catch-up contribution for ages 60–63, the elimination of RMDs from Roth subaccounts, and the Roth employer contribution option — the plan must be formally amended by December 31, 2026. Failure to timely amend can result in plan disqualification.

Roth 401(k) RMD Elimination — A 2024 Change Worth Revisiting

The elimination of RMDs from Roth accounts in employer-sponsored plans technically took effect in 2024, but its planning implications are significant enough to warrant discussion here. Prior to SECURE 2.0, a Solo 401(k) Roth subaccount was subject to the same RMD rules as the pre-tax account — requiring distributions beginning at the applicable RMD age. This was a meaningful disadvantage relative to the Roth IRA, which has never required distributions during the owner's lifetime.

With the RMD elimination now in effect, the Solo 401(k) Roth subaccount and the Roth IRA are on equal footing in this regard. This enhances the long-term compounding potential of Roth contributions made to a Solo 401(k) — and it strengthens the case for the Mega Backdoor Roth strategy, which allows high-income self-employed individuals to potentially convert the entire $72,000–$83,250 annual limit to Roth treatment.

The SECURE 2.0 Timeline for Solo 401(k) Owners

Action Items for Solo 401(k) Owners in 2026

Given everything above, here is a practical checklist for Solo 401(k) owners to address before year-end 2026:

1. Verify your plan document has been updated for SECURE 2.0. The formal amendment deadline is December 31, 2026. If your plan documents have not been reviewed and updated since 2022, this is urgent. Contact your plan administrator.
2. If you are ages 60–63, confirm your plan allows the $11,250 enhanced catch-up. This provision has been available since January 1, 2025, but some custodians and plan documents may not have been updated. Ensure your plan reflects it before year-end.
3. If you operate as an S-Corp and earned over $150,000 in W-2 wages in 2025, ensure your plan has a Roth subaccount. Without one, you cannot make catch-up contributions at all under the 2026 rules. Add the Roth Account Addendum to your plan document immediately.
4. If you are a sole proprietor or single-member LLC earning self-employment income, confirm you are not subject to the Roth catch-up mandate. In most cases you are not — but the analysis depends on your specific business structure and how you receive income.
5. If you have part-time employees working 500+ hours per year, assess their plan eligibility under the two-year rule. If they have completed two consecutive years at that threshold, they may be eligible to participate — which changes your plan from a Solo 401(k) to an ERISA-governed plan.
6. Review your RMD obligations. Confirm your applicable RMD age under the SECURE 2.0 rules (73 for most; 75 for those born in 1960 or later beginning in 2033). Ensure no distributions are being taken unnecessarily from Roth subaccounts, which are now RMD-free.
7. Consider whether Roth employer contributions are appropriate for your situation. If your plan document supports them, designating profit-sharing contributions as Roth can add tax diversification — though it creates a current-year taxable event.