The biggest changes let workplace Roth balances stay put, let unused 529 funds roll to a Roth IRA, and push more catch-up and employer money into Roth accounts. A Roth IRA rollover here means moving eligible retirement or education savings into a Roth IRA under federal rules.
These rules come mainly from SECURE 2.0 and later federal guidance. They affect different savers in different ways. Your age, income, plan type, and account history decide which path fits.
Table of Contents
- Do you still have to empty a workplace Roth?
- Can leftover college savings become retirement savings?
- Will your catch-up contributions become Roth?
- What about Roth employer matches and small-business plans?
Do you still have to empty a workplace Roth?
No. Owners of designated Roth accounts in 401(k) and 403(b) plans no longer owe lifetime required minimum distributions. The IRS says the exemption applies for tax years after Dec.
31, 2023, so no Roth 401(k) RMDs are due from 2024 onward, according to IRS retirement plan RMD guidance. That change reduces pressure to roll a workplace Roth into a Roth IRA only to avoid RMDs. Savers who want consolidation, wider investments, or estate planning may still prefer a rollover. Savers who like their plan fees and options can leave the money in place.
Can leftover college savings become retirement savings?
Yes, within tight limits. Starting Jan. 1, 2024, unused 529 education funds can roll tax- and penalty-free to the beneficiary's Roth IRA, up to a $35,000 lifetime maximum per beneficiary. That option can help families whose child does not need all saved education funds.
Not every 529 qualifies right away. Savers must meet all of these tests, described by Savant Wealth in its 529-to-Roth explainer: For 2026 the IRA limit is $7,500, plus $1,100 at age 50 and older. Direct Roth eligibility also phases out at higher incomes. Check both limits before you plan annual rollover amounts.
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- the rollover counts against that year's IRA contribution limit
- the 529 beneficiary must own the Roth IRA
- the beneficiary must have compensation at least equal to the rollover
- funds contributed during the prior five years cannot be rolled
- the 529 must have existed at least 15 years
Will your catch-up contributions become Roth?
They will if you are an older higher earner at the same employer. Starting in 2026, employees age 50 or older whose prior-year FICA wages from the same employer exceeded $145,000 must make 401(k), 403(b), or governmental 457(b) catch-up contributions as after-tax Roth contributions. The IRS and Treasury set that rule in final regulations summarized in the Roth catch-up announcement. That means the catch-up amount will not lower current taxable pay.
It can still grow for later Roth withdrawal under Roth rules. Workers near the wage line should confirm which wages their employer counts. If your wages were below the threshold, nothing forces a Roth catch-up. You can still choose Roth if your plan offers it. Review your election before payroll applies the 2026 rule.
What about Roth employer matches and small-business plans?
More employer money can now go into Roth form. Since Dec. 29, 2022, plans may let workers elect matching or nonelective employer contributions as fully vested Roth contributions. The elected Roth match is immediately taxable income reported on Form 1099-R. SEP and SIMPLE IRAs also have a wider Roth path.
For tax years after Dec. 31, 2022, they may offer Roth IRAs for salary-reduction and employer contributions, according to industry analysis of IRS guidance in the Ascensus SECURE 2.0 update. Small-business savers gain another possible Roth rollover destination if the plan adopts the option. Ask your plan administrator whether your plan adopted Roth matching or Roth SEP or SIMPLE features. Adoption is optional, so availability varies by employer.
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