SECURE 2.0 Forces Roth Catch-Up Contributions for Earners Above $150,000 Starting 2026
Beginning January 1, 2026, workers earning more than $150,000 in FICA wages must direct all catch-up contributions in 401(k), 403(b), and governmental 457(b) plans to after-tax Roth accounts, with the immediate federal tax cost on an $8,000 catch-up reaching $2,560 for a single filer in the 32% bracket. Major recordkeepers including Fidelity, Vanguard, Schwab, and Empower have adopted divergent default mechanisms, meaning some affected participants will have contributions automatically rerouted to Roth while others will have contributions blocked until they act. Several implementation details remain unsettled, including how controlled group employers must aggregate wages and what notice procedures satisfy the IRS's deemed-election standard.