With the new year will come new retirement savings rules.

On January 1, some new provisions of the federal pension law Secure 2.0 will come into force. These new rules may help you save more for retirement or force you to start making withdrawals.

Here’s how these will affect your retirement savings and inheritance.

Older Workers May Contribute More to Retirement Plans

Some older workers may be eligible to join larger jobs. capture contributions Workplace retirement plans such as 401(k)s and 403(b) thanks to the new Secure 2.0 provisions,

Workers aged 60, 61, 62 or 63 will be able to make catch-up contributions up to $11,250 In 2025, that figure was $7,500 for all other workers age 50 and older.

Michael Griffin, CFP at Henssler Financial, recommends that older workers who still want to save and have extra income to invest take advantage of the new rule.

“If you have the capacity to save additional money, we definitely recommend doing so,” Griffin said. “If you already have quite a bit of money in your retirement account, perhaps the catch-up contribution might not be that beneficial to you.”

Employers Should Automatically Enroll Their Employees in Retirement Plans

The new rules will also require 401(k) and 403(b) plans. sign up automatically workers unless they choose to withdraw.

Workers must initially sign up at rates of 3% to 10%. After that, the savings rate is increased by one point each year until it reaches at least 10%, but this rate is limited to 15%.

“We definitely have a savings problem in the U.S. where younger workers don’t want to contribute to retirement accounts,” Griffin said. “You can start saving at 3% and look at that account in five years and say, ‘Wow, this is working for me.’”

Although the policy is intended to encourage people to save for retirement, some Vanguard research shows that automatic enrollment and increases may not benefit retiring workers. I change jobs often and don’t stay around long enough to reap the benefits of the increased savings rate.

Did you inherit an IRA? You Will Need to Take Required Minimum Distributions

In the past, people who inherited IRAs from their parents or grandparents could let the investments in that account grow over time, deferring taxes and taking distributions whenever they wanted. The Security Act eliminated these “stretch IRAs,” instead requiring people to take distributions over a 10-year period.

“If someone receives money from a parent or actually anyone other than their spouse, that’s when these new rules come into effect,” said Brett Koeppel, CFP and founder of Eudaimonia Wealth. Spouses who inherit IRAs can still take advantage of the “stretch IRA” benefit.

The rule only applies to people who inherit IRAs from people who died in 2020 or later. The IRS recently clarified how these distributions will be taken out.

Starting in 2025, non-spousal beneficiaries of inherited IRAs must take distributions from their accounts each year until the end of the 10-year period during which the account must be completely drained, explained Rob Williams, Charles Schwab’s managing director of Financial Planning.

And if someone doesn’t receive a distribution from the IRA they inherited by the deadline, they could face a penalty of up to 25% of the undistributed amount.