Beginning January 1, 2026, deferred compensation plans such as 403(b), 401(k), and 457plans that offer age-based catch-up contributions will be required to apply new Roth rules for certain participants. Under Section 603 of the SECURE 2.0 Act, participants who are age 50 or older and earned more than $150,000 in FICA wages from their current employer in the prior year must make all catch-up contributions as Roth (after-tax).
What this means:
- Catch-up contributions allow employees age 50+ to save beyond the standard IRS limit ($24,500 in 2026).
- Eligible participants ages 50–59 and 64+ may contribute up to $8,000 in catch-up contributions.
- Participants ages 60–63 may contribute up to $11,250, reflecting an enhanced limit already in effect.
- If you meet the income threshold and do not proactively elect Roth catch-up contributions, the plan will automatically designate and remit them as Roth under an IRS-approved deemed election.
For general questions, contact your campus Benefits office.
Frequently Asked Questions
The Section 603 requires that all age-based catch-up contributions to retirement plans be made as designated Roth (after-tax) contributions for participants whose wages are more than $150,000 (indexed annually) in the prior calendar year from their employer sponsoring the plan.
Wages are, generally, defined in Internal Revenue Code Section 3121(a), which usually means Form W-2, Box 3 compensation.
The deemed Roth catch-up rule allows for a participant whose FICA wages in the prior calendar year from the employer sponsoring the Plan were more than $150,000, to continue making age-based catch‑up contributions and be made as Roth contributions even if prior contributions were made on a pre-tax basis. If your intent is not to make Roth age-based catch-up contributions, you may elect to cease your contributions once you reach the standard IRS contribution limit.
|
Employee age |
Annual catch-up contribution limit1 |
Contribution type |
|
|
Prior year earnings greater than $150,000 |
Prior year earnings less than or equal to $150,000 |
||
|
50-59 |
$7,500
|
Roth contribution |
Pretax and/or Roth after-tax contributions, |
|
60-63 |
$11,250 for 2026 |
Roth contribution |
Pretax and/or Roth after-tax contributions |
|
64 or older |
$7,500
|
Roth contribution |
Pretax and/or Roth after-tax contributions |
You can contact:
- Your campus HR benefits team.
- TIAA at 800-732-8353 to schedule a consultation, or 800-842-2252 for account assistance.
- Schedule a consultation online at org/schedulenow.