Tax Blog

Roth Catch-Up Treatment Is Changing for Some High Earners

Written by Carla Medrano | Dec 18, 2025 10:14:08 PM
 

What’s Changing and Why It Matters

Under the SECURE 2.0 Act (a retirement savings law enacted in 2022 with provisions now being implemented), a new rule affects how certain older, higher-paid workers make catch-up contributions to workplace retirement plans such as 401k, 403b, and governmental 457b plans. 
 
Broadly:
  • Catch-up contributions are extra retirement savings opportunities available to participants age 50 or older above the regular annual contribution limit. See 2026 limits in our Year-End Tax Planning Guide.
  • Historically, individuals could choose to make catch-up contributions on a pre-tax (traditional) or Roth (after-tax) basis (if their plan allowed). SECURE 2.0 changes this for higher earners.  

The Key Change

Beginning in 2026, if an employee:
 
  • is age 50 or older, and
  • earned more than ore than $145,000 in the prior year
 
then any catch-up contributions they make must be designated as Roth contributions (i.e., after-tax). If the plan does not offer a Roth option, those individuals cannot make catch-up contributions.  This applies to catch-up contributions beginning in 2026. 

Client FAQ: Catch-Up Contributions Under SECURE 2.0

 
  1. What exactly is changing starting in 2026?
    Anyone age 50 or older who earned above the IRS wage threshold in the prior year must make all catch-up contributions on a Roth (after-tax) basis instead of the traditional pre-tax way. 

  2. Who is considered a “higher earner” for this rule?
    A “higher earner” is someone who exceeded the threshold for Social Security wages from their employer in the prior year. For 2026 planning, that threshold is $145,000. 

  3. Why does this matter for me or my retirement plan?
    Making catch-up contributions as Roth means you pay tax on the contribution today rather than later in retirement, reducing your current-year tax deduction on that amount. It can still grow tax-free and be drawn tax-free in retirement. 

  4. What if my employer’s plan doesn’t offer Roth contributions?
    If your plan doesn’t offer a Roth contribution option and you are subject to the mandatory rule, you may not be able to make any catch-up contributions. Most plans now offer Roth options, but it’s critical to confirm. 

  5. Can I still make traditional catch-up contributions if I earn less than the threshold?
    Yes. If your prior-year wages are below the threshold, you can still choose traditional (pre-tax) or Roth catch-up contributions if your plan allows both. 

  6. Does this affect the standard contribution limit too?
    No. This only changes the catch-up portion for higher earners. The standard annual contribution limits and age-based “super catch-up” amounts (e.g., higher limits for ages 60-63) are separate and still apply. See 2026 limits in our Year-End Tax Planning Guide.

  7. What should I do now to prepare?
    Check whether your employer’s plan offers a Roth contribution option, and work with your tax and retirement advisors to evaluate whether Roth catch-up contributions make sense for your tax and retirement goals given this new rule.
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