What the 2026 SECURE Act Means for Your Retirement Savings

As we look toward 2026, a major change is coming to retirement savings plans that could affect higher-income earners. The SECURE Act 2.0, passed in late 2022, includes a provision that changes how certain individuals make catch-up contributions to their 401(k) plans.

Here’s what you should know and how to prepare.

What’s Changing?

Starting January 1, 2026, if you are 50 or older and earned more than $150,000 in FICA wages from your employer in 2025, any catch-up contributions you make to your 401(k), 403(b) or governmental 457(b) plan must be made as Roth contributions—not pre-tax.

This means:

• Catch-up contributions will be after-tax, but earnings grow tax-free.
• You’ll pay taxes now, but enjoy tax-free withdrawals in retirement on qualifying distributions.
• If your employer’s plan does not offer a Roth option, catch-up contributions will not be allowed unless the plan is updated.

Who Is Affected?

You may be impacted if:

• You’ll be 50 or older in 2026.
• You earned more than $150,000 in FICA wages from your employer in 2025.
• You plan to make catch-up contributions to your retirement plan.

This income threshold will be adjusted for inflation in future years. [irs.gov]

What Should You Do Now?

1. Review Your 2025 Income

If you expect to earn over $150,000, prepare for the Roth contribution requirement.

2. Check Your Plan’s Roth Option

Not all plans currently offer Roth contributions. If your plan doesn’t, speak with your HR department or plan administrator about adding this feature.

3. Update Payroll Elections

Make sure your payroll settings are aligned with Roth contributions starting in 2026.

4. Consult Your Financial Advisor

Evaluate how this change fits into your broader retirement and tax strategy, and explore ways to offset the loss of current-year tax deductions.

Why This Matters

While this change may increase your taxable income in the short term, it also creates a valuable opportunity for long-term tax-free growth. For many high earners, Roth contributions are a strategic way to diversify retirement income sources and manage future tax liabilities.

Timeline & Compliance

The IRS confirmed that the Roth catch-up rule takes effect in 2026, with no further delays.

Employers and plan sponsors must update plan documents and payroll systems by December 31, 2026, but the rule applies to contributions made starting January 1, 2026. [irs.gov]

Let’s Talk

If you have questions about how this change affects your retirement planning—or if you’re unsure whether your plan is ready—reach out to us. We’re here to help you navigate these updates with confidence and clarity.

Contact us today to schedule a review of your retirement strategy. Beacon Wealth Partners 973-667-8650 BeaconWealthPartners.com.