7 new ways to boost your retirement savings

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 Richard Polimeni, managing director, head of education savings programs, at Bank of America. 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."

Once you reach age 50, you can stash extra money — so-called "catch-up" contributions — in a workplace retirement plan or IRA. Yet the catch-up contribution limit popup for traditional and Roth IRAs has been stuck at $1,000. Starting in 2024, the limit will be indexed for inflation.

Other changes to catch-up contributions are coming soon. Starting in 2026, all catch-up contributions to 401(k), 403(b) and government 457(b) retirement plans by those earning more than $145,000 will be permitted only on an after-tax basis to a Roth account. To help compensate for the lost tax advantage, starting in 2025, workers aged 60 to 63 will be able to make significantly larger contributions to their workplace plans.

Your advantage: "A lot of people are not saving enough to ensure that they have a secure retirement," Vrdoljak says. "Larger catch-up contributions could help eliminate that shortfall. You may also want to consider other places to deposit extra cash," such as funding a health savings account, which can offer substantial tax benefits, or paying off high-rate debt before you retire.