If you’re age 50 or older and contributing extra to your retirement plan, there’s good news: you can continue doing it the way you have been—at least for now.
The IRS has officially delayed a major change from the SECURE 2.0 Act that would have required certain catch-up contributions to be made on a Roth (after-tax) basis starting in 2024. This change has now been postponed until 2026, giving both employees and employers more time to adjust.
Here’s what you need to know.
What Was Supposed to Happen in 2024?
Under Section 603 of the SECURE 2.0 Act, starting in 2024:
Workers age 50 and older who earn more than $145,000 in wages from their employer (adjusted annually for inflation) were going to be required to make catch-up contributions to Roth accounts.
This rule applied to most employer-sponsored retirement plans, including 401(k), 403(b), and governmental 457(b) plans.
Traditional pre-tax catch-up contributions would no longer be allowed for these high earners.
A Legislative Glitch Raised Alarms
In the process of adding this new Roth requirement, lawmakers inadvertently deleted the section of the tax code that allowed catch-up contributions altogether. This mistake created confusion and concern about whether any catch-up contributions would be allowed starting in 2024.
IRS Notice 2023-62: Relief Is Here
In response, the IRS issued Notice 2023-62, clarifying two important points:
Catch-up contributions are still allowed — the IRS will interpret the law as if this legislative mistake never happened.
The Roth-only requirement is delayed until 2026, giving employers and retirement plan providers time to update their systems.
This means:
All workers age 50+ can continue making catch-up contributions, whether Roth or pre-tax.
High earners (those earning over $145,000 in wages) can still choose pre-tax catch-up contributions through 2025.
What This Means for You
If you're over 50 and making catch-up contributions to your retirement plan:
You don’t need to take any action right now.
You can still choose pre-tax catch-up contributions in 2024 and 2025, even if you earn over $145,000.
We’ll keep monitoring future guidance to ensure you stay compliant and make the most of your retirement savings options.
What This Means for Employers and Plan Sponsors
If you administer or sponsor a retirement plan:
You now have until 2026 to implement the new Roth-only catch-up contribution rules for high earners.
This delay allows time to update payroll systems, plan documents, participant communications, and more.
The IRS may issue additional guidance over the next year, including clarification for self-employed individuals and coordination with payroll systems.
Planning Ahead
While this delay offers welcome breathing room, the Roth requirement is still coming. Now is a great time to:
Review your income level and catch-up contribution strategy
Discuss whether pre-tax or Roth contributions are better for your long-term goals
Plan for the coming changes before the 2026 deadline
Let’s Talk
Have questions about SECURE 2.0, catch-up contributions, or optimizing your retirement strategy? We’re here to help you stay ahead of the changes and make confident financial decisions.