If you are 50 or older and earned $145,000 or more in 2025, your 2026 catch-up contributions will now be after-tax Roth.
What is the rule?
Starting January 1st, 2026, the SECURE 2.0 Act requires certain employees to make any retirement plan catch-up contributions on an after-tax Roth basis.
Applies to:
- Employees 50 or older in 2026.
- Employees who earned $145,000 or more in 2025.
What needs to be done?
The plan will need to be amended and catch-up contributions will need to be designated as Roth.
- If the plan does not offer a Roth option, it must be amended to do so. At Trinity we have proactively amended all existing client plans at no additional cost and ensure all new startup plans include this provision.
- Plan sponsors will need to communicate the requirement to withhold catch-up contributions as Roth deferrals to their payroll provider. Should plan sponsors need assistance identifying employees that this provision applies to, please feel free to reach out to Trinity Pension Consultants.
- Plan sponsors with self-directed brokerage accounts will need to create a process to designate catch-up Roth contributions to be in a separate brokerage account.
What does this mean for participants?
Roth Catch-up contributions are not tax deductible, and withdrawals are tax free in retirement (age 59 ½).
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Trinity Pension Consultants