New SECURE 2.0 Roth Catch-Up Rule Takes Effect in 2026
Starting January 1, 2026, high earners who made more than $150,000 in FICA wages in 2025 must make their 401(k) catch-up contributions on a Roth after-tax basis. The rule, part of the SECURE 2.0 Act, removes the option for these workers to make pre-tax catch-up contributions. Employers whose plans do not offer a Roth option cannot accept catch-up contributions from affected employees.
A new retirement savings rule took effect January 1, 2026, requiring high-earning workers to make their 401(k) catch-up contributions on an after-tax basis.
Under the SECURE 2.0 Act, employees who earned more than $150,000 in FICA wages from their plan-sponsoring employer in 2025 must now direct any catch-up contributions to a Roth 401(k). The rule removes the option for these workers to make pre-tax catch-up contributions.
The change affects workers aged 50 and older who want to contribute beyond the standard $24,500 limit. The standard catch-up amount is $8,000. Workers aged 60 through 63 may contribute up to $11,250 as a super catch-up.
Employers whose plans do not include a Roth contribution feature cannot accept catch-up contributions from affected employees at all. Plan sponsors must amend their plan documents to add Roth features by December 31, 2026, if they want to continue offering catch-up opportunities to high earners.
The IRS has said it will apply a reasonable, good-faith compliance standard through the end of 2026 as employers adjust.
Some exceptions apply. The special 15-year catch-up available to long-term employees in 403(b) plans is not subject to the Roth-only requirement. Special catch-up contributions in governmental 457(b) plans during the three years before normal retirement age are also exempt.
Financial advisors say the rule has a silver lining: Roth contributions grow tax-free and are not subject to required minimum distributions in retirement. For high earners who expect to remain in a high tax bracket, the after-tax treatment may prove beneficial over time.
