The SECURE 2.0 Act Roth catch-up mandate goes into effect January 1,2026.
What is the “Roth catch-up” mandate
• The mandate originates from the SECURE 2.0 Act of 2022. Under this law, catch-up contributions for older plan participants (e.g. 50+) — extra contributions beyond standard 401(k)/403(b)/457 deferral limits — may in certain cases have to go into Roth (after-tax) accounts rather than traditional pre-tax accounts.
• Specifically, the requirement applies when a participant’s “wages” (as defined for Social Security / FICA) from the prior year exceed a certain threshold, currently $150,000 (subject to inflation adjustments).
Recent announcement & timing (as of September 2025)
• On September 15, 2025, the U.S. Department of the Treasury and the IRS released final regulations implementing the catch-up contribution rules under SECURE 2.0, including the Roth-only requirement for eligible high-wage earners.
What changes for affected retirement-plan participants
• If you are 50 or older and eligible for catch-up contributions, and your prior-year wages exceeded the threshold (e.g., $150,000), then catch-up contributions in 2026 (or beyond) must go into a Roth account rather than a traditional pre-tax account.
• Employees making less than the threshold who wish to switch from deferring on a pre-tax basis to deferring on Roth basis, must make change on Transamerica Website.
Why the change — and what it means
• The shift is intended by lawmakers (via SECURE 2.0) to increase the share of retirement savings that are taxed upfront (Roth) rather than deferred — which can increase taxable revenue over time.
• For savers: this means paying tax now on your catch-up contributions — but qualified withdrawals in retirement (both contributions + earnings) will be tax-free under Roth rules (assuming the standard Roth-withdrawal rules are met).
Employees are encouraged to review their retirement strategy and consult a financial or tax advisor if they have questions about how this change may affect them.