Ask Erick: Mandatory 401k Roth Catch-up in SECURE Act 2.0

Q: Erick, can you provide clarification on the SECURE Act 2.0 mandatory Roth catch-up provision for high earners?

A: This was confusing for many employers as well as for the 401k industry. In 2026, mandatory Roth catch-up contributions for high-earning employees age 50 or older will become effective. Specifically, if an individual’s FICA wages from the same employer sponsoring the plan exceeded $145,000 in the prior calendar year (indexed annually), then any “catch‑up” contributions they elect must be made on an after‑tax Roth basis for 401(k), 403(b) or governmental 457(b) plans. If a plan does not have an existing Roth provision, they are not required to add it, but they will not be able to allow those employees to use the existing catch-up contribution provision in the plan.

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Are 401(k) Catch-Up Contributions Still Pre-Tax for High Earners?

Not for everyone. Beginning in 2026, employees age 50 or older whose prior-year FICA wages from the employer sponsoring the plan exceeded the IRS threshold ($150,000 for 2025 wages, indexed annually) must make any catch-up contributions as Roth contributions. Roth contributions are made with after-tax dollars, so they do not reduce current taxable income, though qualified withdrawals in retirement can be tax-free. Employees at or below the threshold can still choose pre-tax catch-up contributions if the plan allows. The rule applies to 401(k), 403(b), and governmental 457(b) plans. A plan without a Roth feature may not offer catch-up contributions to affected employees unless it adds one.

Retirement Partners of California helps employers prepare for this change and explain it to employees. Consult your tax professional, plan document, or advisor about your situation.

Retirement Partners of California Can Help!

We’ll design an Employee Financial Education Plan to help improve your 401k participant results.