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Ask the Experts September 24, 2024
Will Age 60-63 Catch-Up Contributions Have to Be Made as Roth?
Experts from Groom Law Group and CAPTRUST answer questions concerning retirement plan administration and regulations.
Reported by PS
Q: Will the requirement that catch-up contributions be Roth, beginning in 2026, apply to the special age 60-63 “super” catch-up election as well?
Kimberly Boberg, Kelly Geloneck, Emily Gerard and David Levine, with Groom Law Group, and Michael A. Webb, senior financial adviser at CAPTRUST, answer:
A: Unfortunately, it seems that the answer is yes.
For those of you who may not be aware, individuals with prior-year-eligible FICA [Federal Insurance Contributions Act] wages of $145,000 (indexed) or more will not be permitted to make pre-tax catch-up elections beginning in 2026. See Notice 2023-62.
The applicable provision of the SECURE 2.0 Act of 2022, Section 603, amends Section 414(v) of the Internal Revenue Code, the provision that applies to all catch-up contributions, including the new age 60-63 “super” catch-up. Therefore, it currently appears that all catch-up contributions must be Roth for such individuals, as the new language under Code Section 414(v) does not contain a carve-out for these increased catch-up amounts.
The Experts provided other information about “super” catch-up contributions in columns earlier this year.
NOTE: This feature is to provide general information only, does not constitute legal advice and cannot be used or substituted for legal or tax advice.
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