For nearly 25 years, employees age 50 and older have had the opportunity to
In 2025, the standard contribution limit is $23,500. Participants who are 50–59 or 64 and older may contribute an additional $7,500, while those aged 60–63 can contribute up to $11,250 extra.
SECURE 2.0 also included a provision requiring certain catch-up contributions to be made on a Roth (after-tax) basis. In September 2025, the IRS issued final regulations confirming that the Roth catch-up contribution requirement will apply to taxable years beginning after December 31, 2025—meaning implementation begins in 2026. However, the final regulations formally apply starting in 2027, so for 2026, plans may rely on a reasonable, good-faith interpretation of the statute.
Most employer-sponsored plans, including 401(k), 403(b), and 457(b) plans, allow contributions on both a pre-tax and Roth after-tax basis. Pre-tax contributions reduce the portion of income subject to current taxes, while Roth contributions grow potentially tax-free if withdrawals are made after age 59½ and the account has been held for at least five years.
Previously, employees could choose between pre-tax and Roth for catch-up contributions. SECURE 2.0 now requires that employees above a certain income threshold must make these catch-ups as Roth contributions. This rule was originally scheduled for 2024 but was delayed until 2026 to allow the IRS to finalize guidance and employers to update systems and plan documentation.
The IRS regulations indicate that the Roth catch-up requirement applies to contributions in taxable years starting after Dec. 31, 2026, though plans may adopt the rule earlier using a reasonable, good-faith interpretation.
Employers will determine whether an employee meets the threshold using FICA wages from Box 3 of the previous year’s W-2. For 2026 contributions, this means using 2025 W-2 information. The rule does not apply to individuals without prior-year W-2 wages, such as self-employed participants.
This requirement applies to both standard and super catch-ups in 401(k), 403(b), and 457(b) plans. It does not apply to SIMPLE plans or certain special catch-up contributions allowed under 403(b) and 457(b) plans. Plans that do not currently offer Roth contributions must either add a Roth option or limit catch-up contributions for affected participants.
Employees affected by this change should review their tax and retirement planning strategies. While Roth contributions may provide significant long-term tax benefits, losing the pre-tax catch-up option could increase taxable income in 2026 and affect overall tax planning.
Employers should coordinate with plan providers and advisors to ensure their plans are updated and compliant ahead of the implementation date.
Navigating the changes to Roth catch-up contributions can be complex for both employees and employers. Meaden & Moore’s team of tax and advisory professionals can help:
By working with Meaden & Moore, organizations can ensure compliance and help employees make informed decisions about their retirement savings.
Connect with our team to discuss how these changes may impact your retirement plans and overall tax strategies.