Get Ready for Roth-Plus: 2024 and 2025 SECURE 2.0 Changes Increase Roth Contributions

The SECURE 2.0 Act of 2022 (Division T of Pub. L. No. 117-328), or SECURE 2.0, includes provisions that take effect in 2024 and 2025. For example, 401(k) and 403(b) plans have been permitted to include salary deferral catch-up contributions for more than 20 years, giving participants, age 50 or older, a chance to boost their retirement savings. For 2023, the catch-up contribution limit is $7,500 (indexed). While, based on plan design, participants have been able to choose the form of catch-up—pre-tax, Roth, or a mix of the two—effective January 1, 2024, SECURE 2.0 required catch-up contributions to be made on a Roth basis, for participants with wages greater than $145,000 in the previous year. IRS just provided a two-year pause on that requirement. IRS Notice 2023-62. Another Roth change starts in 2025, providing a new catch-up limit for employees who are ages 60 to 63 (permitting contributions equal to the greater of $10,000 or 150% of the regular catch-up limit). Plan ahead—but now at an easier pace!

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