Roth catch-up contributions

Mandatory for certain employees

Participants in 401(k), 403(b) and governmental 457(b) plans will be required to make age 50+ catch-up contributions on a Roth basis beginning 2026.

How is SECURE 2.0 relevant to you?

Select one of the options below to learn more.

Background

Thought leadership

Mandatory and optional provisions

Corrections and guidance

On August 25, 2023, the Internal Revenue Service released Notice 2023-62 that extends the compliance date to January 1, 2026.

Learn more

Prior to SECURE 2.0, participants in 401(k), 403(b) and governmental 457(b) plans had the option to make catch-up contributions on a pre-tax or Roth basis if they were aged 50 or older—and if the plan documents permitted catch-up contributions.

Effective for plan years beginning January 1, 2026, participants whose W-2 FICA^* income is $145,000 or greater (indexed for inflation) will no longer have the option to make catch-up contributions on a pre-tax basis. Catch-up contributions for participants with income greater than $145,000 in the preceding calendar year (and from the current employer) can only be made on an after-tax (Roth) basis.

Remember…

Pre-tax: participants elect to defer a portion of their pay into plans before it is taxed—meaning that contributions and earnings grow tax-deferred until these funds are distributed.

Roth basis: participants elect to contribute a portion of their after-taxed pay—meaning that contributions are taxed at the current tax rate, but earnings grow tax-deferred, and distributions are tax free if the account is at least five years old, and the participant is at least 59 ½.

View contribution limits

What about participants who earned less than $145,000 in the prior year?

Catch-up contributions are intended to give older participants the opportunity to defer additional amounts on a tax-favored basis as they get closer to retirement age. Participants that make less than $145,000 in FICA income can still make catch-up contributions on a pre-tax basis, which means that these participants can continue to take advantage of tax-deferred contributions and earnings.

How will this impact plan administration?

Many experts believe that this provision will improve retirement readiness for participants who are nearer to retirement age. However, it will also increase the administrative complexity for plans in several ways. In general, this provision will be significant for plans that currently do not offer catch-up contributions or have a Roth option.

Please continue to reach out to your financial professional or Corebridge financial professional for more information about whether adding a Roth option to your qualified plan makes sense.

_{*Federal Insurance Contributions Act (FICA) is a U.S. federal payroll tax that allows you to earn credits for Social Security benefits.}

_{This material is general in nature, was developed for educational use only, and is not intended to provide ﬁnancial, legal, ﬁduciary, accounting or tax advice, nor is it intended to make any recommendations. Applicable laws and regulations are complex and subject to change. Please consult with your ﬁnancial professional regarding your situation. For legal, accounting or tax advice consult the appropriate professional.}

Corebridge Financial: Moving financial futures forward.

As these SECURE 2.0 provisions become effective, plan sponsors will have more flexibility in helping employees achieve personal and financial wellness. For more information about these and other SECURE 2.0 provisions, reach out to your Corebridge representative and visit our online hub. This new online resource breaks down and simplifies relevant provisions of SECURE 2.0. We will continue to update the hub with more relevant and timely content—so please visit often.

What makes Corebridge different

Discover more

Expansive solutions to help secure financial futures

Industry experts all-in on your success

Experiences and resources to drive action

Extending financial wellness to all

Discover More