Beginning January 1, 2026, new rules under the SECURE 2.0 Act will change how certain retirement plan participants make age 50 and older catch-up contributions.
Employees age 50 and older may contribute additional amounts to their retirement plan beyond the standard annual IRS limit. For 2026, individuals age 50 or older may contribute an additional $8,000, and those ages 60–63 may be eligible to contribute up to $11,250 in catch-up contributions depending on the plan.
However, starting in 2026, individuals whose Social Security wages exceeded $150,000 in the prior calendar year will be required to make their age 50+ catch-up contributions as Roth (after-tax) contributions rather than pre-tax contributions. These individuals are considered High Wage Earners (HWE) under the new rule.
Social Security wages are generally the wages reported in Box 3 of your Form W-2 from the employer sponsoring the retirement plan. If those wages exceed $150,000, any catch-up contributions you make in the following year must be designated as Roth contributions.
If you are eligible for catch-up contributions, it may be a good time to review your current retirement contribution elections and consider how this change may affect your overall savings strategy.
If you have questions about how this update may impact your retirement plan contributions, please contact our office.
Source: Voya Financial