The U.S. Treasury Department and the Internal Revenue Service released final regulations for retirement catch up contributions, which are additional contributions that workers 50 and older can make to their retirement accounts. The new regulations are required under the SECURE 2.0 Act – a 2022 law designed to make saving for retirement easier. 

The main takeaway: highly-paid employees who need to make additional contributions can do so, as long as they are Roth contributions, instead of pre-tax contributions.

Under the final regulations, employees over 50 who made at least $145,000 from their current employer in the past year and make additional contributions to 401(k), 403(b) or governmental 457(b) retirement plans, will have to make those contributions as post-tax Roth contributions, rather than pre-tax contributions.

In addition, the regulations allow for employees aged 60 through 63 to make “super catch-up” contributions. Certain catch-up contributions in 403(b) plans will not be designated as Roth contributions, according to the IRS.

Post-Comment Changes 

The IRS also made some changes to the proposed rules following a public comment period.

Among them: plan administrators are now allowed to aggregate a participant’s wages from certain separate common law employers to determine whether the participant’s income meets the level requiring Roth catch-up contributions.

Additional changes were made to the following topics:

  • Correction of a failure to comply with the Roth catch-up requirement;

  • Implementation of a deemed Roth election; and

  • Plans that cover participants in Puerto Rico. 

In addition, the regulations include advice to help plan administrators implement and comply with the new catch-up rule. 

2027 Date 

The final regulations apply to contributions in taxable years beginning after December 31, 2026. However, plans can implement the Roth catch-up requirement for taxable years beginning before 2027 using a reasonable, good faith interpretation of statutory provisions.