If you’re age 50 or older, earning more than $150,000 a year, and consistently maximizing your retirement plan contributions, upcoming rule changes could impact how you save.
Two key updates from the SECURE 2.0 Act are reshaping catch-up contributions:
- As of 2025, individuals ages 60–63 will become eligible for enhanced “super catch-up” limits—up to $11,250—to help accelerate savings in the years leading up to retirement.
- Starting in 2026, workers earning more than $150,000 (in prior-year FICA wages, indexed for inflation) must make catch-up contributions on a Roth (after-tax) basis rather than pre-tax.
These updates present both opportunities and important planning considerations for high-income earners.
1. The 2025 Super Catch-Up Limit: A Chance to Save More
The new “super catch-up” rule allows individuals ages 60–63 to contribute up to $11,250 to their employer-sponsored retirement plan in 2025. This is 50% more than the standard $7,500 catch-up for those 50 and older.*
For anyone in their early 60s, this is a valuable opportunity to maximize retirement savings during peak earning years. Adding even a few years of higher contributions can have a significant impact on long-term account growth, especially when combined with compounding and potential employer matches.
If you’re eligible, consider increasing your contributions now to make the most of this window.
2. The 2026 Roth-Only Rule: A Shift in Tax Strategy
The second major change affects high earners who are age 50+. Starting in 2026, employees 50 and older whose prior-year wages exceed $150,000 (as reported on Form W-2, Box 3 for FICA wages) will be required to make catch-up contributions on a Roth (after-tax) basis.
This means those contributions will be taxed in the year they’re made, but the funds will grow—and later be withdrawn—tax-free in retirement.
While this eliminates the immediate tax deduction high earners previously received for pre-tax catch-ups, the long-term benefits of Roth contributions, including tax-free growth and flexibility in retirement, can be substantial.
3. Who Is Affected
- High earners age 50+: Starting in 2026, employees earning over $150,000 must make their catch-up contributions as Roth contributions.
- Individuals ages 60–63: You can already take advantage of the super catch-up limit beginning in 2025 and beyond.
- Plans without a Roth option: If your employer’s plan doesn’t currently offer Roth contributions, high earners won’t be able to make catch-ups after 2025 unless the plan is updated.
4. Why These Changes Matter
- Tax timing: Shifting from pre-tax to Roth contributions changes when you pay taxes, which can affect your overall strategy.
- Plan readiness: Payroll and retirement plan systems will need updates to track FICA wages and apply the Roth requirement.
- Strategic opportunity: For many, these changes can be used to balance pre-tax and Roth assets for greater tax flexibility in retirement.
- Extra savings power: The super catch-up gives those in their early 60s an added boost to strengthen retirement readiness.
5. What You Should Do Now
For Individuals
- Review your 2025 W-2 (Box 3 FICA wages) to see if you’re close to or above the $150,000 threshold.
- Confirm your employer’s plan offers a Roth contribution option.
- Work with your financial advisor to decide whether increasing Roth contributions now could benefit your long-term tax outlook.
- If you’re ages 60–63, consider maximizing the new super catch-up limit in 2025 to make the most of this opportunity.
For Employers and Plan Sponsors
- Ensure your plan includes a Roth option for high earners.
- Update payroll and recordkeeping systems ahead of the 2026 effective date.
- Communicate these updates clearly to employees age 50 and older.
Key Numbers at a Glance
- Standard catch-up (age 50+): $7,500 in 2025
- Super catch-up (ages 60–63): $11,250 in 2025
- Income threshold: $150,000 in prior-year FICA wages (indexed annually for inflation)
- Roth-only rule effective: Tax years after December 31, 2025
The Bottom Line
For high earners age 50 and older, these rule changes may require adjustments, but they also open new opportunities for tax-advantaged growth.
Taking time now to evaluate your contribution strategy and confirm your plan’s Roth capabilities can help ensure a smooth transition and position your retirement savings for long-term success.
At Trust Point, we help clients navigate changing regulations with confidence. If you’re a high earner nearing retirement, let’s make sure your savings strategy is optimized for what’s ahead. Connect with our team today.
*Actual limits may vary based on IRS cost-of-living adjustments.
