By Rebekah Meredith
Key Change Under SECURE 2.0
Beginning Jan. 1, 2026, the SECURE 2.0 Act requires catch-up contributions for higher-income earners be made on a Roth basis. This applies to employees aged 50 and older who earned more than $150,000 in wages during the prior year, as defined by Social Security reporting. For these individuals, catch-up contributions must go into a Roth 401(k) account, meaning they are made with after-tax dollars.
Advisors will want to consider helping clients anticipate higher current tax liability, while positioning them for tax-free withdrawals in retirement.
How Advisors Can Address Changes with Clients
When dealing with individuals, advisors should start by segmenting their client base to identify those who are likely to cross the $150,000 threshold. These clients will be directly impacted by the new rule, and proactive communication is essential. If not already doing so, advisors may also want to consider incorporating tax planning guidance into their conversation, as many clients may be surprised by reduced take-home pay. It may help to model how the shift from pre-tax to Roth catch-up contributions will affect both current taxable income and long-term retirement outcomes.
Advisors should also be prepared to discuss alternative vehicles like Roth IRAs, backdoor Roth conversions or taxable brokerage accounts to ensure clients maintain flexibility in their retirement savings.
When it comes to working with business owner clients and their company 401(k) plan, one critical step is reviewing employer plan design. Advisors should confirm whether their clients’ plans offer Roth contribution options, and if they don’t, be sure the client is aware of the required update to their plan document and work with their service provider to accomplish this update.
Pre-2026 vs. Post-2026 Catch-Up Rules
| Year | Eligible Age | Income Threshold | Contribution Type | Advisor Focus |
| Pre-2026 | 50+ | None | Pre-tax or Roth | Maximize tax deferral or diversify |
| 2026+ | 50+ | $150,000+ | Roth only | Manage current tax liability, optimize Roth strategy |
Advisor Checklist for 2026
- Review client income levels for 2025 to determine Roth requirement
- Confirm plan Roth availability with employer sponsors
- Update financial plans to reflect after-tax contributions
- Educate clients on long-term tax-free growth benefits
- Explore Roth IRA and conversion strategies for flexibility
Bottom Line for Advisors
The Roth catch-up requirement is more than a compliance update—it’s an opportunity for advisors to reposition retirement strategies for high-income clients. By proactively addressing tax implications, plan design challenges and communication hurdles, advisors can strengthen client trust and demonstrate their value as forward-looking partners in retirement planning.
If you have any questions or would like to discuss how these opportunities may apply to your clients, our team would be happy to connect.