The IRS has proposed new rules for catch-up contributions, which are extra contributions to 401(k) or similar retirement plans for employees aged 50 or older.
Announced on Jan. 10, the proposed regulations aim to clarify how statutory changes introduced by the SECURE 2.0 Act should be implemented. With the proposal, the agency is also seeking to address public feedback received in response to an earlier notice, which provided initial guidance on catch-up contribution requirements.
The proposed rules introduce several key updates to the Internal Revenue Code (IRC) that are intended to improve retirement savings options and ensure compliance with the SECURE 2.0 Act.
Starting in 2026, employees earning more than $145,000 annually will be required to make their catch-up contributions as after-tax Roth contributions. While these contributions will not reduce taxable income in the year they are made, they will grow tax-free, and withdrawals during retirement will not be taxed. This change applies to employees aged 50 or older who participate in 401(k), 403(b), or similar retirement plans.
Until the Roth requirement takes effect in 2026, all eligible employees aged 50 or older, regardless of income, will still be able to make catch-up contributions under the existing rules. […]
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