Federal law · SECURE 2.0
The law that pays for the fix.
SECURE 2.0 — the 2022 federal retirement law — phases in through this decade. For owner-led firms it does two large things: it subsidizes new and newly designed small plans, and it widens what older owners can shelter. Both clocks are already running.
The credit stack.
Per plan, clocked from establishment, for employers with 50 or fewer employees:
| Credit | What it covers in practice | Amount |
|---|---|---|
| Admin-cost credit | The administration fee, effectively | 100% of costs up to $5,000/yr tax years 1–3 |
| Employer-contribution credit | A large share of the safe harbor | Up to $1,000 per employee earning under $100k 100 / 100 / 75 / 50 / 25% over years 1–5 |
| Auto-enrolment credit | The plumbing | $500/yr for 3 years |
Credited dollars can't also be deducted — we net that in every design study. The clock runs from the plan's establishment, not from today: a plan born in 2024 is in its final covered year in 2026. Plans established before 2022 don't qualify.
More room after 60.
SECURE 2.0 raised the catch-up for ages 60–63 to $11,250 — against $8,000 from age 50 — on top of the $24,500 base deferral and the $72,000 overall cap. An owner aged 60–63 can reach $83,250 in the 401(k) alone, before any pension layer.
One string attached: owners with prior-year wages over $150,000 must now take the catch-up as Roth. Still worth taking — it's the only capacity in the system that rides above the cap.
What it means, by situation.
- 01
Starting a plan now: the full credit stack applies — for some firms, the fix is better than free in year one.
- 02
Owner 60 or older: the raised catch-up stacks with the cash-balance layer — the widest shelter window the law has ever offered.
- 03
Plan established before 2022: no credits — but the design mathematics stands on its own, and we'll show it before you commit to anything.
Credit and limit figures reflect SECURE 2.0 as applied for 2026; eligibility depends on your facts, confirmed before any design is adopted. Not legal or tax advice.