What you need to know about SECURE 2.0’s catch-up contributions for high-wage earners

The SECURE 2.0 Act of 2022 mandates that starting January 1, 2026, all catch-up contributions for employees earning over $150,000 in Social Security wages must be made on a Roth basis. These employees are termed "High-Wage Earners.

Here’s what you need to know

Employee deferrals will be regular contributions until the IRS Section 402(g) limit (e.g., $24,500 in 2026) is reached. Contributions exceeding this limit will be catch-up contributions. For High-Wage Earners, these catch-up contributions must be Roth contributions. Any Roth contributions below the IRS 402(g) limit count towards the Required Roth Catch Up requirement. If a plan lacks a Roth feature, High-Wage Earners cannot make catch-up contributions from 2026.

Other considerations

Some payroll providers will automatically identify High-Wage Earners and allocate catch-up contributions to a Roth source. If not, you must coordinate with your provider to track Social Security wages, identify High-Wage Earners, and switch them to Roth contributions once the IRS 402(g) limit is reached.

An update or amendment to your plan document may be necessary depending on your TPA service provider. Ensure your TPA is ready for the January 1, 2026, effective date. If your plan lacks a Roth feature and you want High-Wage Earners to continue making catch-up contributions, a plan amendment is required.

For questions or assistance, contact IFS.

About Joe

With over 23 years of experience in the retirement plan and financial services industry, Joe specializes in helping businesses design, implement, and optimize their employer-sponsored retirement plans. As a trusted retirement plan advisor, Joe works closely with plan sponsors to ensure fiduciary compliance, improve plan participation, and deliver meaningful retirement outcomes for employees.

About IFS

IFS is a premier retirement consulting firm dedicated to helping businesses design, implement, and manage retirement programs that drive meaningful results for both employers and employees. With a client-focused approach, we specialize in delivering customized 401(k), 403(b), and defined benefit plan solutions that maximize value, ensure compliance, and promote long-term retirement readiness.

Our seasoned retirement plan advisors bring decades of industry experience, acting as a true fiduciary partner to guide plan sponsors through every stage; from strategic plan design to ongoing performance monitoring. We are committed to simplifying complex regulations, controlling costs, and enhancing participant outcomes.