Roth Catch-Up 2026 Delay: How $150K+ Earners Use Extension Year — Requirement

The roth catch up requirement 2026 delay is an SECURE Act 2.0 provision that requires workers age 50 and older earning over $150,000 in prior-year wages to make catch-up contributions to a Roth account rather than a traditional pre-tax account. This mandate takes effect January 1, 2026, giving high earners one final opportunity in 2025 to make traditional pre-tax catch-up contributions before the new rules take effect. The extension year is the last window for high earners to reduce current taxable income through catch-up contributions, after which all catch-up contributions above the $150,000 threshold must be Roth-designated.

2025 Extension Year: The Final Window for Traditional Catch-Up Contributions

The SECURE 2.0 Act introduced a significant change for high earners: starting in 2026, catch-up contributions for workers age 50 and older with prior-year wages over $150,000 must be made to a Roth account rather than a traditional pre-tax account. This requirement, known as the roth catch up requirement 2026 delay, gives high earners one final year—2025—to make traditional pre-tax catch-up contributions before the new rules take effect.

For 2025, workers age 50 and older can contribute up to $7,500 in catch-up contributions to a traditional 401(k) on a pre-tax basis, regardless of income level.¹ This is the standard catch-up limit under SECURE 2.0. The 2025 extension year is the last opportunity for high earners to reduce their current taxable income through catch-up contributions before the Roth mandate begins.

Consider a hypothetical scenario: a 62-year-old executive earning $200,000 in 2025 who maximizes the $7,500 catch-up contribution to a traditional 401(k) reduces their 2025 adjusted gross income by that amount. At a typical marginal federal tax rate of 32%, this saves approximately $2,400 in current-year taxes.² For workers in SIMPLE plans, the 2025 extension year is the last opportunity for pre-tax SIMPLE catch-up contributions, with the 2026 Roth mandate applying equally to both plan types.³

The extension year also allows workers to make catch-up contributions to SIMPLE 401(k) plans, where the 2025 limit is $3,500 for those age 50 and older.³ For workers in SIMPLE plans, the 2026 Roth mandate applies equally, making 2025 the final year for pre-tax SIMPLE catch-up contributions as well.

The Roth Catch-Up 2026 Delay — What Changed and Why

The roth catch up requirement 2026 delay stems from SECURE 2.0 Section 603, which requires catch-up contributions to be Roth-designated for participants whose prior-year wages exceed $145,000 as defined in IRC § 3121(a).² The IRS issued final regulations in October 2025 providing implementation guidance for plan sponsors.⁴

The key change is straightforward: starting January 1, 2026, workers age 50 and older earning over $150,000 in the prior year must make all catch-up contributions to a Roth account within their employer-sponsored retirement plan.⁵ This applies to 401(k), 403(b), and governmental 457(b) plans.

The rationale behind the change is tax policy: Congress aimed to increase Roth tax collections by requiring high earners to use after-tax dollars for catch-up contributions. For plan sponsors, the change requires administrative updates to handle Roth-only catch-up tracking and income verification.

Who the $150K+ Threshold Affects in 2025 and 2026

The $150,000 threshold applies to wages as defined under IRC § 3121(a) for FICA tax purposes, not total MAGI.² This distinction matters because wages exclude certain income sources like investment gains, rental income, and pension distributions.

For a typical late-career professional earning $160,000 in W-2 wages with $20,000 in capital gains, the $160,000 in wages exceeds the threshold, triggering the Roth catch-up requirement in 2026. However, a retiree earning $140,000 in wages plus $30,000 in pension income would not trigger the requirement, since wages fall below $150,000.

The threshold is not indexed for inflation under current law, meaning more workers will be affected over time as wages rise.

How High Earners Can Use the Extension Year Strategically

High earners have several strategic options during the 2025 extension year. The most direct approach is maximizing the $7,500 traditional catch-up contribution to reduce 2025 taxable income.¹ For someone in the 35% federal bracket, this saves $2,625 in current-year taxes.

A second strategy involves coordinating catch-up contributions with Roth conversions. Suppose a worker earning $180,000 in 2025 makes the full $7,500 traditional catch-up contribution, reducing AGI to $172,500. They could then convert $7,500 from a traditional IRA to a Roth IRA at the same marginal rate, effectively moving pre-tax dollars to Roth without increasing current-year tax liability.

For workers age 60 to 63, SECURE 2.0 Section 603 also allows an increased catch-up limit of $11,250 starting in 2025, though this higher limit applies to both traditional and Roth catch-up contributions.⁶ The $11,250 limit is available regardless of income, making it particularly valuable for high earners in the extension year.

Coordinating Catch-Up Contributions with Social Security Timing

Catch-up contributions affect Social Security planning through their impact on taxable income. For workers still employed at age 62 or older, traditional catch-up contributions reduce MAGI, which can lower the portion of Social Security benefits subject to taxation.

The Social Security earnings test applies to workers who claim benefits before full retirement age while still earning wages. In 2025, the earnings test exempts $23,400 in annual wages; earnings above this threshold reduce benefits by $1 for every $2 earned.⁷ Traditional catch-up contributions do not reduce wages for earnings test purposes, since the test uses gross wages before retirement plan deductions.

However, for workers who delay Social Security until full retirement age or later, catch-up contributions provide a different benefit: reducing MAGI in the years before claiming can lower the tax torpedo effect when benefits begin. A hypothetical worker earning $175,000 in 2025 who contributes $7,500 to a traditional 401(k) reduces their MAGI to $167,500, potentially keeping more Social Security benefits out of the taxable range.

Medicare IRMAA Implications of Higher 401k Contributions

Medicare Income-Related Monthly Adjustment Amounts (IRMAA) surcharges apply to Part B and Part D premiums for beneficiaries with modified adjusted gross income above certain thresholds. For 2025 premiums, the first IRMAA threshold is $106,000 for single filers and $212,000 for married filing jointly.⁸

Traditional catch-up contributions reduce MAGI, which can help beneficiaries stay below IRMAA thresholds. For a married couple with $220,000 in MAGI, a $7,500 traditional catch-up contribution from each spouse reduces combined MAGI to $205,000, potentially avoiding the first IRMAA surcharge tier entirely.

The two-year lookback rule means 2025 MAGI affects 2027 IRMAA determinations. A high earner who maximizes traditional catch-up contributions in 2025 may reduce their 2027 Medicare premiums, creating a multi-year benefit from a single year's contribution strategy.

Spousal Planning: Coordinating Catch-Up Rules for Married Couples

Married couples face unique considerations when one or both spouses earn above the $150,000 threshold. The Roth catch-up requirement applies individually based on each spouse's wages, not combined household income.

Consider a married couple where one spouse earns $180,000 in wages and the other earns $80,000. The higher-earning spouse must use Roth catch-up contributions starting in 2026, while the lower-earning spouse can continue making traditional catch-up contributions. In 2025, both can make traditional catch-up contributions regardless of income.

For couples where both spouses earn above $150,000, the 2025 extension year allows combined traditional catch-up contributions of up to $15,000 ($7,500 each), reducing household AGI by the same amount.¹ If both are age 60 to 63, the combined limit rises to $22,500 ($11,250 each) under the super catch-up provision.⁶

Spousal IRA catch-up contributions follow different rules. For 2025, the spousal IRA catch-up limit is $1,000 for the spouse age 50 or older, on top of the $8,000 regular IRA contribution limit.⁹ These IRA contributions are not affected by the SECURE 2.0 Roth mandate, which applies only to employer-sponsored plans.

Building a Tax-Efficient Withdrawal Plan for the Extra Year

The 2025 extension year creates an opportunity to restructure withdrawal strategies for tax efficiency. Workers who plan to retire within the next few years should consider how catch-up contributions interact with future withdrawals.

A tax-efficient approach involves three steps. First, maximize traditional catch-up contributions in 2025 to reduce current-year taxes. Second, use the tax savings to fund a Roth IRA or Roth 401(k) for future tax-free growth. Third, plan for 2026 by adjusting withholding or estimated tax payments to account for the loss of the catch-up deduction.

For workers approaching retirement, the extension year also allows for Roth conversion planning. Suppose a 64-year-old worker plans to retire at 66. Making traditional catch-up contributions in 2025 reduces the traditional 401(k) balance, potentially lowering future RMDs. The worker could then convert smaller amounts to Roth during the lower-income years between retirement and RMD commencement.

Your Next Step

Review your 2024 W-2 wages to determine whether you will exceed the $150,000 threshold in 2025.⁵ If your wages are above this level, contact your benefits administrator to confirm your 401(k) plan will accept Roth catch-up contributions starting in 2026. Then, adjust your 2025 contribution elections to maximize traditional catch-up contributions before the window closes. For workers age 60 to 63, confirm whether your plan allows the increased $11,250 super catch-up limit and adjust contributions accordingly. Finally, schedule a mid-year review of your 2025 income to ensure you remain on track for your contribution goals.