As part of our ongoing commitment to keep you informed and well‑positioned, we want to share an important retirement planning update that took effect in 2026 under the SECURE 2.0 Act. While not every client will be immediately impacted, these changes are especially relevant for those in their peak earning years and those approaching retirement.
Roth catch‑up contributions for higher earners
Beginning in 2026, individuals age 50 and older who earned more than $150,000 in Social Security wages in 2025 from their current employer are now required to make any workplace retirement plan catch‑up contributions as Roth (after‑tax) contributions rather than pre‑tax. This rule applies to 401(k), 403(b), and governmental 457(b) plans. For 2026, the catch-up contribution is increased to $8,000.
For those whose prior‑year wages fall below this threshold, catch‑up contributions may still be made on a pre‑tax or Roth basis, depending on your employer’s plan. It is also important to be aware that if an employer has not yet amended their plan to include Roth deferrals, higher‑earning participants may lose the ability to make catch‑up contributions altogether.
New “super catch‑up” opportunity for ages 60–63
SECURE 2.0 also introduced a significant planning opportunity for those nearing retirement. Individuals ages 60 through 63 are now eligible for an enhanced or “super catch‑up” contribution. For 2026, this increased catch‑up amount is up to $11,250, allowing for accelerated retirement savings during these critical final working years. Once an individual reaches age 64, the catch‑up contribution limit reverts to the standard age‑50+ level.
Why these changes matter
These updates are about more than just higher contribution limits. Roth catch‑up contributions can help build future tax‑free income, provide greater flexibility in retirement, and potentially reduce the long‑term impact of required minimum distributions. At the same time, moving from pre‑tax to Roth contributions can affect current tax planning and consequently cash flow, making thoughtful coordination especially important.
The “Rothification” of catch-up contributions is a big shift, but it’s also an opportunity. With the right planning, you may be able to turn this change into a long-term advantage.
If you are approaching age 50 or 60, expect to make catch‑up contributions, or simply want to ensure these new rules are being incorporated appropriately into your plan, we would be glad to review this with you. Please email us at clientservices@avodahadvisors.com.
For a list of contribution limits and other important planning numbers for the 2026 tax year, please click on the link below: