By Chris Thompson
The year is already rapidly coming to a close, making it peak season for assessing (and, in many cases, reassessing) contribution options related to retirement savings accounts. A major factor worth considering heading into the new year is changes to the SECURE 2.0 Act’s catch-up contribution rule. The changes began on Jan. 1, 2026, and could have a significant impact on individuals 50 years of age and older who earned more than $150,000* in 2025.
What is a catch-up contribution?
If you’re age 50 or older and have any variety of qualifying retirement savings accounts — including 401(k)s, 403(b)s and 457(b)s — you have the option of contributing additional pretax funds beyond the standard contribution limits set by the Internal Revenue Service. 1 These catch-up contributions are designed to help people nearing retirement give their investments an extra boost.
How did the SECURE 2.0 Act affect investors?
Passed in December 2022, the SECURE 2.0 Act was created to encourage greater use of retirement plans that allow Americans to prepare for their golden years. The catch-up contribution limit for participants ages 60 to 63 remained unchanged in 2025 at $11,250 and is dubbed a “super catch-up” contribution. 2 This allows individuals within this age group to contribute well above the standard catch-up amount and take advantage of their peak earning years.
What is the new catch-up contribution rule?
Beginning in the new year, individuals with employer-sponsored 401(k), 403(b) and 457(b) government retirement plans who are 50 years of age or older and who earned more than $150,000* in FICA wages the previous taxable year must put their catch-up contributions into a designated Roth account after taxes. 3 Simply put, this means any catch-up or super catch-up contributions for these high-income earners will be subject to tax deductions. This change does not impact a participant’s standard contributions to their employer-sponsored retirement savings, which will continue to be able to be contributed pretax and will not impact individuals who made less than $150,000 in FICA wages the prior year.
How can I prepare for this change?
For individuals nearing retirement, it’s important to regularly reassess your contributions and make sure they’re aligned with upcoming regulatory changes, shifts in late-career professional plans and your personal income needs and financial goals. A financial advisor can help navigate these decisions and diversify investments to set you up for success in retirement.
* In Federal Insurance Contributions Act (FICA) wages and adjusted for inflation
Chris Thompson, CFP ®, CMFA ®, CRPC ® is a Private Wealth Advisor and managing director with Upper Deck Wealth Management a private wealth advisory practice of Ameriprise Financial Services, LLC.in Ponte Vedra Beach, FL. He specializes in fee-based financial planning and asset management strategies and has been in practice for 33 years . To contact him, visit www.ameripriseadvisors.com/team/upper-deck-wealth-management, 818 A1A N, Suite 301
Ponte Vedra Beach FL, (904) 380-2322.
