At times, families accumulate more in a 529 education savings account than their student needs, thanks to diligent saving, strong market gains or higher-than-expected financial aid, or perhaps the child has decided not to go to college, after all. Prior to SECURE Act 2.0, you had the option to name another family member as the beneficiary of the 529 account or to withdraw the excess funds, potentially triggering income taxes on the earnings — plus a potential 10% additional federal tax since the money isn’t being used for education.

Now families have an additional choice: Roll over unused 529 funds into a Roth IRA in the beneficiary’s name, subject to eligibility criteria. There are some caveats: You can roll over no more than the Roth annual contribution limit per year ($7,000 in 2024) and a maximum of $35,000 over the beneficiary’s lifetime. The 529 account must have been open for more than 15 years, the beneficiary must have earned income, the Roth rollover can’t exceed those earnings, and it must come from contributions made to the 529 at least five years prior to the rollover date.

Your advantage: “This can be a great opportunity to jump-start a beneficiary’s retirement savings,” says Polimeni. And for parents unsure of how much they may need to save for education in a 529, this change could reduce worries about any funds not used for education. “It provides more flexibility.”

For many recent college graduates, funding a workplace retirement plan takes a back seat to paying off student loans — which means they can miss out on a company match on their savings, not to mention years of potential compound gains on their investments.

Employers now have the option to also “match” qualified employee student loan payments with contributions to a retirement account, even if the employee doesn’t participate in the plan. (Only 401(k), 403(b) and government 457(b) retirement plans are eligible.) Say the employee contributes only 3% of their salary from each paycheck to their retirement plan and also pays $800 per month in student loans. The employer would match their retirement contribution and their loan payment, subject to certain annual contribution limits and the company's match formula, which must be the same for student loan payments and retirement contributions.

Your advantage: If your company offers this option, it could help you start building or increasing your retirement savings, as you juggle student loan payments. “By putting off saving for retirement, you lose the most powerful asset you have, which is time,” says Nevenka Vrdoljak, managing director, Chief Investment Office, Merrill and Bank of America Private Bank. “The dollars you put aside early on are especially valuable.”

Prior to the implementation of this Secure Act 2.0 provision, you could make penalty-free withdrawals from your retirement plans only for certain reasons, such as $5,000 for birth and adoption expenses, before age 59½. Now anyone facing a personal or family emergency will be able to withdraw up to $1,000 a year from an IRA or a workplace retirement plan penalty-free (if your employer adopts this feature as an option). Domestic abuse survivors can withdraw $10,000 penalty-free if their employer offers this.

In addition, SECURE Act 2.0 allows employers to offer short-term emergency savings accounts as part of their retirement plans for non-highly compensated workers. Employees can contribute up to $2,500 (with future limits to be indexed for inflation) to these accounts via payroll deductions and withdraw the funds tax-free for any reason (certain limits may apply). Contributions to this type of savings account are counted toward the annual employee contribution limits for the retirement plan.

Your advantage: “These new withdrawal provisions let you pay for unexpected expenses without incurring additional taxes,” says Polimeni. But keep in mind that you may still pay a price. “That money is no longer growing tax-deferred,” Polimeni notes, “and it won’t be available later in retirement.”