2026 Update and Practical Guidance
What Is the SECURE 2.0 Roth Catch-Up Rule?
The SECURE 2.0 Act made important changes to how workers can save extra for retirement. Starting in 2026, if you’re age 50 or older and want to make “catch-up” contributions to your 401(k), 403(b), or governmental 457(b) plan, you may have to make those contributions as Roth (after-tax) dollars—depending on how much you earned in the previous year.
When Does the Rule Take Effect?
The new Roth catch-up rule starts with contributions made in 2026. It applies to employees who earned more than $150,000 in Social Security wages (that’s Box 3 on your 2025 Form W-2) from their employer in 2025. If you’re in this group, any catch-up contributions you make in 2026 must go into a Roth account, meaning you pay taxes on the money now, but withdrawals in retirement are tax-free if certain conditions are met.
What If I Earned Less Than $150,000?
If your Social Security wages from your employer in 2025 were $150,000 or less, you can still choose whether your catch-up contributions are pre-tax (traditional) or Roth, as long as your plan allows both options.
2026 Catch-Up Contribution Limits
- For 401(k), 403(b), and governmental 457(b) plans, the catch-up limit is $8,000.
- For SIMPLE IRA and SIMPLE 401(k) plans, the catch-up limit is $4,000.
- If you turn 60, 61, 62, or 63 in 2026, you can make a larger “super catch-up” contribution: $11,250 for 401(k), 403(b), and 457(b) plans, and $5,250 for SIMPLE plans.
These limits are adjusted for inflation, so they may increase in future years.
What Do Employers Need to Do?
Employers must:
- Update plan documents to reflect the new Roth catch-up rules.
- Track employee ages and Social Security wages to know who must make Roth catch-ups.
- Make sure all eligible employees can use the “super catch-up” if the plan offers it.
- Correct errors if, for example, a required Roth catch-up is made as pre-tax. The IRS allows corrections by either updating the employee’s W-2 or by moving the money to a Roth account within the plan, as long as this is done by the end of the following year.
What Do Employees Need to Do?
- Check your 2025 Form W-2, Box 3, to see if your Social Security wages were over $150,000.
- If you’re over the threshold, know that any catch-up contributions in 2026 must be Roth.
- Ask your employer if your plan offers Roth contributions and the “super catch-up” feature for ages 60–63.
- Decide whether to make catch-up contributions and, if you have a choice, whether to make them pre-tax or Roth.
Special Considerations
- Governmental and collectively bargained plans have more time to comply with the new rules—generally until 2027 or later, depending on when their legislative session or bargaining agreement ends.
- If a plan does not offer Roth contributions, high earners (those over the $150,000 threshold) will not be able to make catch-up contributions at all until the plan is updated to allow Roth contributions.
Conclusion
The new Roth catch-up rules are a big change for both employers and employees. Employers should review and update their retirement plans, payroll systems, and employee communications. Employees should check their W-2s, understand their options, and talk to their employer or plan administrator about how the new rules affect them. Taking these steps now will help everyone make the most of their retirement savings opportunities under the new law.
