Starting January 1, 2026, if you earned more than $150,000 in FICA wages from your current employer in the previous year, any age-based catch-up contributions you make to the Plan must be made as Roth (after-tax) contributions.

A provision of the SECURE Act 2.0 mandates that starting in 2026, certain higher-income individuals must make any catch-up contributions to qualified retirement plans as Roth (after-tax) contributions. If your FICA earnings in 2025 will exceed $150,000, this requirement would apply to any age 50+ and age 60-63 catch-up contributions you make. FICA wages are the types of pay that count toward Social Security taxes. This includes salary, tips, bonuses, commissions and some extra benefits that an employee might receive (such as a company car). You can find this total in Box 3 of a W-2 form.

Under current proposed regulations, a participant who is eligible to make special 457(b) catch-up contributions (which are separate from age 50+ and age 60-63 catch-ups) may continue to make such contributions on either a pre-tax or Roth basis, rather than Roth only.

If you are planning to make age 50+ or age 60-63 catch-up contributions in 2026 or later, you must make arrangements to comply with this new requirement. Here’s how:

  • Check your earnings. Confirm whether your FICA wages will exceed $150,000 this year (2025).
  • Update your contribution elections. Log in to your retirement plan account or contact us to adjust your catch-up contributions to Roth, if required or desired.
  • Consult a tax advisor. Because Roth contributions are made with after-tax dollars, this change could impact your take-home pay and tax planning.
  • Stay informed. The IRS may issue further guidance. If it does, we will share that information in future newsletters, on our website and via other communications.
To discuss whether this requirement applies to you and how to comply, contact your Kentucky Retirement Specialist.
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