Big changes are coming to 401(k) “catch-up” contributions under the SECURE 2.0 Act. If you’re age 50 or older, these updates could affect how much you can save and how your contributions are taxed.
🔹 What Are Catch-Up Contributions?
If you’re 50 or older, you can contribute more to your 401(k) beyond the regular annual limit. For 2025, the standard catch-up is $7,500, on top of the $23,000 elective deferral limit.
🔹 2025: “Super Catch-Up” for Ages 60–63
Starting in 2025, workers aged 60 to 63 can contribute up to $11,250 in catch-up.
🔹 2026: Mandatory Roth Catch-Ups for High Earners
Beginning January 1, 2026, anyone earning more than $145,000 (from the same employer, adjusted for inflation) must make catch-up contributions as Roth contributions paid with after-tax dollars. Employers aren’t required to offer Roth, so check with your plan sponsor on details.
Earn under $145K: You may still choose pre-tax or Roth.
Earn over $145K: Catch-ups must be Roth.
If your plan doesn’t have a Roth option, you won’t be able to make catch-up contributions until it adds one.
🔹 Inflation Adjustments
Both the regular and “super” catch-up limits will adjust for inflation each year. Projections suggest modest increases for 2026, but final IRS limits will be announced later in 2025.
🔹 What You Should Do Now
Check with HR or your plan administrator to confirm Roth and super catch-up options.
Estimate your wages to see if you’ll exceed the $145K threshold in 2026.
Review your tax strategy Roth contributions mean paying taxes now, but withdrawals are tax-free later.
✅ Bottom Line
The Catch-Up changes create both opportunity and complexity. Older workers can save more, but starting in 2026 higher earners will need to shift to after-tax Roth catch-ups. Review your plan soon and coordinate with your tax or financial advisor to make the most of these new rules.