Overview
The SECURE Act 2.0 passed in December of 2022 expands upon the original SECURE Act. This updated legislation introduces modifications to several retirement plan rules, including changes that impact 401(k) and Solo 401(k) catch-up contributions.[i]
Catch-Up Contributions
Catch-up contributions give participants nearing retirement age the ability to increase retirement savings (Figure 1). In 2025, the catch-up contribution amount is limited to $7,500 (in addition to the regular 401(k) plan contribution limit of $23,500).
The SECURE Act 2.0 allows those aged 60-63 the ability to increase contributions by an additional catch-up. If you fall into this age band, you can put in $11,250 instead of the standard $7,500 catch-up amount (Figure 1).
Catch-Up Contribution Requirements for High Earners
Another change to note: effective in 2026, if your income during the previous year exceeded $145,000, your catch-up contributions must be made into a Roth 401(k), which means that contributions will be after-tax. [i] [ii] Due to this change, high earners must make catch-up contributions using after-tax dollars, preventing them from reducing their taxable income in the year of contribution.
Since not all 401(k) plans are set up with a Roth feature, employers should confirm whether this option is available and, if necessary, make adjustments to enable it. More information about Roth contributions can be found here.
Conclusion
The new features provided by the SECURE Act 2.0 are meant to help individuals better prepare for long-term financial stability. If these new regulations affect you, consult your financial advisor and accountant to determine the best strategy that aligns with your financial plan.
[i]https://www.irs.gov/newsroom/treasury-irs-issue-proposed-regulations-on-new-roth-catch-up-rule-other-secure-2-point-0-act-provisions
[ii] https://www.federalregister.gov/documents/2025/01/13/2025-00350/catch-up-contributions
