Attention Employees 50+: Discover What’s New with Retirement Plan Catch-Up Contributions

VOLUME 17 | ISSUE 4

The SECURE (Setting Every Community Up for Retirement Enhancement) 2.0 Act passed in 2022 and largely focused on improving retirement savings opportunities for American workers, especially those aged 50 and above. These updates introduce several new features intended to increase participation and improve the efficiency of employer-sponsored retirement plans, including 401(k), 403(b), government 457, thrift savings, and specified IRA plans.

Key provisions include automatic enrollment, which ensures employees are signed up for retirement plans unless they choose to opt out, and incentives for employers to offer such plans. Additionally, employers may now match student loan payments, and eligibility criteria have been expanded for long-term, part-time employees. Updates to catch-up contribution rules have also been introduced to further support retirement savings for older employees.

Super Catch-Up

Many employees are familiar with catch-up contributions, which are special provisions in retirement plans that allow individuals aged 50 and above to contribute more toward their retirement savings. These increased limits are designed to help older workers boost their retirement funds as they approach retirement age. Eligibility to claim catch-up provisions is based on your age on December 31^st of any given plan year. For example, an employee turning 50 on November 9, 2025, is eligible for the regular catch-up provision in 2025.

Beginning in 2025, retirement plan participants who are between the ages of 60 and 63 will benefit from an enhanced catch-up contribution option, known as the super catch-up contribution. For the 2025 tax year, the standard contribution limit for retirement plans is $23,500. Employees aged 50 or older may add a catch-up contribution of $7,500, allowing for a combined total of $31,000 in contributions.

Those who fall within the 60-63 age group, however, can take advantage of the super catch-up contribution, which increases the allowable catch-up amount to $11,250. This results in a maximum annual contribution of $34,750 for eligible participants ($23,500 regular contribution plus $11,250 super catch-up contribution). It is important to note that the super catch-up contribution replaces the standard catch-up amount for this age group; it is not additive. Therefore, individuals aged 60-63 can contribute up to $34,750, but not more.

The table above summarizes the maximum contribution limits for regular, catch-up, and super catch-up contributions, including the anticipated increases for 2026. Final figures for 2026 limits will be released in the fourth quarter of 2025.

Looking ahead to 2026 and beyond, it is important for high-income earners to be aware of new rules introduced under the SECURE 2.0 Act. Certain catch-up and super catch-up contributions will be subject to additional requirements, which may influence individual retirement savings strategies.

Roth Catch-Up Requirement

Beginning in 2026, the SECURE 2.0 Act introduces a significant change for high-income earners aged 50 or older. Individuals earning $145,000 or more per year will be required to make their catch-up and super catch-up contributions as Roth (after-tax) contributions, rather than traditional pre-tax contributions.

Pre-tax contributions allow you to defer income and taxes now, with the expectation of paying taxes when you withdraw funds during retirement. In contrast, Roth contributions require you to pay taxes today, but offer the advantage of tax-free growth and withdrawals in retirement.

This new requirement will likely increase the current tax liability for high-income earners. Currently, many individuals over the age of 50 maximize their ability to reduce taxable income by contributing $31,000 to $34,750 in pre-tax dollars. Starting next year, however, only the regular contribution amount will be eligible for pre-tax treatment, while catch-up and super catch-up contributions must be made as Roth contributions. As a result, the benefit of the super catch-up contribution for high earners may be diminished.

The combination of these changes can be complex and can impact your overall tax situation. Reach out to your financial advisor to determine which SECURE 2.0 Act changes apply to your situation and to understand their impact on your financial plan.