Overview

• IRS and Treasury finalized related rules last week, setting 2026 as the start for Roth treatment of catch-up contributions by workers 50+ who exceed the high-earner threshold.
• For 2026, eligibility is based on 2025 W-2 wages above an inflation-indexed $145,000, with the threshold set to adjust over time.
• Plan sponsors are not required to add a Roth feature, so affected employees in plans without Roth may lose access to catch-ups, though many providers are adding Roth options.
• Employers have until the 2027 tax year to complete plan amendments and fully align operations with the new requirements.
• Roth treatment taxes contributions upfront and can raise current tax bills, but future withdrawals are tax-free; current 2025 catch-up limits are $7,500 for ages 50+ and $11,250 for ages 60–63.