Workers 50 or older who earned over $150,000 in 2025 Social Security wages must now put all 401(k) catch-up contributions into Roth accounts. The mandatory Roth switch costs affected workers upfront deductions worth $1,900 to $2,700 per year, depending on age and catch-up amount. Workers whose employer plan lacks a Roth option lose catch-up contributions entirely under SECURE 2.0, so verifying plan features is urgent.
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Advisor.com's free matching tool pairs you with vetted fiduciaries from major national firms, all in under three minutes. See who you match with today. The rule took effect on January 1, and it changes how a specific slice of American workers save for retirement.
If you are 50 or older and earned more than $150,000 in Social Security wages in 2025, any catch-up contribution you make to a 401(k) this year has to go into a Roth account. The pretax option that older, higher-income savers have relied on for years is no longer available to this group. The threshold in the underlying law was originally set at $145,000, but it is adjusted annually for inflation, which is why the 2026 figure is $150,000.
The number that matters is Box 3 on your 2025 W-2, which reports earnings subject to Social Security tax. Self-employment income on a 1099, or partnership income on a K-1, does not count toward the threshold, according to tax specialists cited by The New York Times. The standard employee deferral limit for a 401(k) this year is $24,500.
Workers 50 and older can add a catch-up contribution of $8,000, for a total of $32,500. A separate "super" catch-up applies to workers aged 60 to 63, who can add $11,250 instead, bringing their total to $35,750. At age 64, the standard catch-up amount returns.
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