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Workers 50 and older will soon face new limits on a key retirement benefit, according to final regulations issued by the U.S Department of the Treasury and the IRS.
The regulations were published Sept. 16 in the Federal Register and are effective on Nov. 17, 2025. Most provisions generally apply to contributions for tax years starting after Dec. 31, 2026, although certain rules for specific plans and situations may have different applicability dates.
Higher-income workers who earn more than $145,000 must now put their catch-up contributions into a Roth 401(k), meaning that they’ll pay taxes now rather than later in retirement. The rules generally apply to contributions beginning in 2027, but some plans can implement them earlier.
The $145,000 income threshold is based on prior-year wages and applies separately at each employer. New hires and self-employed workers without W-2 wages are exempt.
Workers 50 and older can contribute an extra $7,500 to their 401(k) on top of the $23,500 limit in 2025. The SECURE 2.0 Act raises the limit for those ages 60 to 63 with a “super catch-up” of up to $11,250. Regular and catch-up limits generally rise with inflation, although the super catch-up is expected to stay the same.
The final regulations also guide plan administrators to implement and comply with the new Roth catch-up rule. The rules also cover multiple jobs, government and union plans, as well as plans in Puerto Rico.
The changes end the option for pretax catch-ups for high earners, meaning some workers will pay taxes on contributions during peak earning years.
Plans that do not offer a Roth option will block catch-up contributions entirely, leaving some employees unable to take full advantage of the benefit.
