SECURE Act 2.0 Changes to Retirement Plan Catch-up Contributions

Last month, the IRS issued final regulations related to several provisions of the SECURE 2.0 Act relating to employer sponsored retirement plan catch-up contributions. Some plans allow additional, or catch-up, contributions for employees 50 and over. For 2025, the regular limit is $23,500. The catch-up limit for those aged 50 and over is $7,500.  Starting in 2025, there is a higher “super catch-up” limit of $11,250 or those turning age 60, 61, 62, or 63 during the year. But this is only if your employer’s plan allows it. Beginning in 2026 this new limit will be indexed for inflation.

Beginning on January 1, 2026, any employee classified as a “high-earner” – defined as someone who earned more than $145,000 in FICA wages in 2025 - will not be able to make pre-tax catch-up contributions in their tax-deferred account. Instead, those employees must contribute their catch-up contributions to a Roth account.

This is a good time to re-evaluate your retirement savings strategy. First, check with your plan to see if they allow catch-up contributions, and if they have a Roth account option. It appears that most plans have Roth options, but if yours does not you may be precluded from making catch-up contributions.  There are some unique rules for SEPs, SIMPLE, 403b, and 457 plans, so check with your plans sponsor.  Employees have until the end of the year to make pre-tax catch-up contributions.

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