Earn over $150K last year? Your catch-up must now be Roth
Data verified: Aug 2026 · Source: IRS Notice 2025-67
A Roth catch-up calculator for the SECURE 2.0 rule: earn over $150,000 from your employer last year and your 2026 catch-up must be Roth.
Your details
This is optional for employers. Check your summary plan description.New hires with no prior-year wages from the employer are exempt in their first year.
Deduction value lost this year
—
Base elective deferral limit
—
Your catch-up amount
—
Total you may defer
—
Catch-up must be Roth?
—
Pre-tax portion
—
Current-year deduction forgone
—
⚠Your 2025 wages of — exceed the — threshold, so your entire — catch-up must be designated Roth. You lose — of current-year deduction — but that money and its growth come out tax-free later.
✓The mandatory Roth rule does not apply to you. You may make your — catch-up pre-tax or Roth, whichever suits you.
⚠Catch-up contributions start at age 50. At — you are limited to the — base deferral.
⚠You are in the 60 to 63 window where the super catch-up would be — instead of —, but your plan does not offer it. That is — of extra deferral room you cannot use.
Deduction lost vs. prior-year wages
2025 wages
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How this is calculated
Section 603 of SECURE 2.0 requires that catch-up contributions be made as Roth — that is, with after-tax dollars — by anyone whose prior-year Social Security wages from that same employer exceeded $150,000. The transition relief under Notice 2023-62 ended on 31 December 2025, so the rule bites for contributions made on or after 1 January 2026.
The threshold is measured on a specific number: box 3 of your W-2 from the employer whose plan you are contributing to. Not total compensation, not household income, and not wages from another job.
Formula
catchUp = age >= 50
? (age 60–63 and plan offers it ? $11,250 : $8,000)
: 0
rothMandated = priorYearSSWages > $150,000
lostDeduction = rothMandated ? catchUp × marginalRate : 0
2026 limits: base elective deferral $24,500; age-50 catch-up $8,000 for a total of $32,500; ages 60–63 super catch-up $11,250 for a total of $35,750. The $150,000 threshold is indexed going forward.
Worked example
Aged 62, prior-year Social Security wages of $200,000, in the 32% bracket, with a plan that offers the super catch-up.
Catch-up available (ages 60–63)$11,250
2025 wages above the $150,000 thresholdYes — Roth mandated
Deduction forgone: $11,250 × 32%$3,600
Current-year deduction lost$3,600
Who is exempt
The rule is narrower than it first appears.
Anyone whose prior-year Social Security wages from that employer were $150,000 or less.
Self-employed people with no FICA wages — there is no box 3 figure, so there is nothing to test.
A new employee with no prior-year wages from that employer is exempt in their first year.
Partners receiving self-employment income rather than W-2 wages.
It is not necessarily a loss
Losing the deduction is a real cost today, but Roth money grows tax-free and comes out tax-free, and it is not subject to required minimum distributions in your own lifetime. If you expect your retirement bracket to be similar to or higher than today's, forced Roth treatment may leave you better off. The genuine complaint is about losing the choice, not about Roth itself.
The super catch-up window closes at 64
The larger $11,250 catch-up applies only in the calendar years you are aged 60, 61, 62 or 63. At 64 you drop back to the standard $8,000. It is also employer-optional, so a plan may simply not offer it.
Frequently asked questions
Which wage figure does the $150,000 test use?
Social Security wages, which is box 3 of your W-2, from the same employer that sponsors the plan, for the prior calendar year. For 2026 contributions that means your 2025 W-2. It is not total compensation, not household income, and not wages from a different employer, all of which are common misreadings of the rule.
What if I changed jobs?
The test looks only at prior-year wages from the employer whose plan you are contributing to. A new employer with no prior-year wages from you means there is no figure to exceed the threshold, so you are exempt in that first year regardless of how much you earned elsewhere. The test resets with each new employer.
Does this affect my base $24,500 deferral?
No. Only the catch-up portion is affected by the mandatory Roth rule. Your base elective deferral of $24,500 remains pre-tax or Roth entirely at your own choice, exactly as before. The rule changes the tax treatment of the additional $8,000, or $11,250 in the super catch-up window, and nothing else.
What if my plan has no Roth option?
Then affected participants cannot make catch-up contributions at all, because there is no permitted destination for them. Most plans added a Roth option specifically ahead of this deadline for that reason. If yours has not, raise it with your plan administrator, since it removes a meaningful contribution allowance.
Am I exempt if I am self-employed?
Generally yes. Self-employment income is not reported as Social Security wages in box 3 of a W-2, so there is no prior-year wage figure capable of exceeding the threshold. Partners receiving self-employment income rather than W-2 wages are in the same position, and can continue making pre-tax catch-up contributions.
Is the $150,000 threshold indexed?
Yes, it is indexed for inflation going forward, so it will rise in later years and gradually capture fewer people in real terms. The figure is measured against the prior calendar year's wages, so the threshold that matters for a given contribution year is the one in force for the year before it.
IRS Notice 2025-67 · IRS Rev. Proc. 2025-19 · IRS Notice 2026-05 · IRS Rev. Proc. 2025-32 · SSA Contribution & Benefit Base
Disclaimer
Estimates for general information only, not tax or retirement advice. Catch-up availability and the super catch-up depend on your specific plan document. Consult your plan administrator and a qualified tax professional.