"The Roth catch-up change stems from Section 603 of the SECURE 2.0 Act of 2022, which requires age‑50+ catch-up contributions made by higher earners to be designated as Roth (after‑tax) rather than pre‑tax, with the intent of raising near‑term federal revenue while preserving catch‑up access and boosting tax‑free retirement balances over time. The change reflects a bipartisan legislative compromise to fund SECURE 2.0's broader retirement enhancements by accelerating tax revenue via Roth treatment for high earners' catch‑ups."
"Starting with tax years beginning after Dec. 31, 2026, catch-up contributions for workers age 50 and older who exceeded $145,000 in prior-year wages must be made on a Roth (after-tax) basis, with the IRS confirming the timeline in final regulations and maintaining a transition period through 2025 for plan administration. Congress has set the earnings trigger at more than $145,000 of prior‑year FICA wages from the plan sponsor, indexed for inflation,"
Beginning with tax years after Dec. 31, 2026, workers age 50 and older who had more than $145,000 in prior-year wages must designate catch-up contributions as Roth (after-tax). The $145,000 trigger is indexed for inflation and applies to 401(k), 403(b), and governmental 457(b) plans. The requirement originates from Section 603 of the SECURE 2.0 Act of 2022 and aims to raise near-term federal revenue while preserving access to catch-up contributions and increasing tax-free retirement balances over time. The Treasury and IRS issued final regulations and allowed a transition period through 2025 for plan administration.
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