The IRS has issued final regulations implementing the Roth catch-up contribution requirement under SECURE 2.0. These rules affect participants age 50 and older who are eligible to make additional elective deferrals (“catch-up contributions”) to 401(k), 403(b), governmental, SEP, and SIMPLE retirement plans.
Key Highlights:
– Super Catch-Up (Ages 60–63, Starting in 2025) –
• 401(k), 403(b), and governmental 457(b) plans: the greater of $10,000 or 150% of the standard catch-up limit.
• SIMPLE IRAs and SIMPLE 401(k) plans: the greater of $5,000 or 150% of the SIMPLE catch-up limit.
• Indexed for inflation after 2025.
– Effective 2027 – High-income employees (prior-year wages over $145,000, indexed) must make catch-up contributions as Roth deferrals.
– Standard Catch-Up (Age 50+) in 2025 –
• $7,500 for 401(k), 403(b), and most 457(b) plans.
• $3,500 for SIMPLE IRAs and SIMPLE 401(k)s.
• Indexed for inflation after 2025.
What This Means for You:
If you are age 50 or older, these changes may impact how you maximize retirement savings.
- Ages 50–59 and 64+ will continue to use the standard catch-up ($7,500 in 2025 for 401(k)/403(b); $3,500 for SIMPLEs, indexed annually).
- Ages 60–63 will have access to a special higher “super catch-up” beginning in 2025.
- High-income earners (>$145,000 in prior-year wages) should prepare for Roth-only catch-up contributions beginning in 2027.
Now is the time to start planning. If you’d like to review how these changes may affect your retirement strategy, we’re here to help at theKFORDgroup
