Catch up contributions: the rules, the age 60-63 bump, and the new Roth requirement

A catch-up contribution is an extra amount that savers aged 50 or over may add to a retirement plan or IRA on top of the ordinary annual limit. The concept is simple and has been in the tax code for years. What has changed is everything around it: a larger catch-up now applies for a four-year age window, and higher earners have lost the choice of making catch-ups pre-tax.

Both changes came from the SECURE 2.0 Act of 2022, and both have now taken effect. If your understanding of catch-ups dates from before 2025, it is out of date in two specific ways that matter to anyone in their late fifties or sixties. This article sets out the current structure, the two changes, and the practical points that decide how much of this you can actually use.

The basic structure

Catch-up contributions exist in two separate systems that are often confused.

Employer plans. Under IRC §414(v), a participant who reaches age 50 by the end of the calendar year may contribute an extra amount to a 401(k), a 403(b) plan, or a governmental 457(b) plan, above the ordinary elective deferral limit. The catch-up is a separate bucket: it does not count against the standard deferral limit, and in a 401(k) it also sits outside the overall annual additions limit that constrains total contributions from all sources.

IRAs. A separate and much smaller catch-up applies to traditional and Roth IRAs for savers 50 and over. It was a flat figure for many years; SECURE 2.0 made it subject to annual indexing, so it now moves with inflation like the main limits.

SIMPLE plans. A SIMPLE IRA has its own catch-up amount, lower than the 401(k) figure, and SECURE 2.0 added further increases for certain plans. The SIMPLE rules run on their own track and should not be read across from the 401(k) numbers.

All of these dollar amounts are set annually by the IRS and change with inflation. Rather than quote figures that will be stale, check the current year's limits directly with the IRS before you set a contribution rate.

The age 60 to 63 bump

Section 109 of SECURE 2.0 created a larger catch-up for a narrow age band. For taxable years beginning after 31 December 2024, a participant who is 60, 61, 62, or 63 by the end of the calendar year may contribute a higher catch-up amount to an employer plan.

The statutory formula is the greater of $10,000 or 150% of the regular catch-up limit for the year, with the $10,000 figure indexed after 2025. In practice the 150% calculation has been the binding one, producing a catch-up half again as large as the standard amount.

Three features of this provision are easy to miss:

• It is a four-year window, not a permanent step up. At 64 the participant reverts to the standard age 50 catch-up. There is no grandfathering.
• It is optional for the plan. Employers are not required to offer the higher limit, and the plan document has to say whether it is available. If your plan does not offer it, you cannot use it, however old you are.
• It applies to employer plans, not IRAs. The IRA catch-up has no equivalent bump.

For someone in that age band whose mortgage is paid and whose children have finished education, the window lines up with the years when surplus income is often highest. It is worth checking with the plan administrator whether the higher limit is actually available before assuming it.

The Roth requirement for higher earners

This is the change with the most practical bite. Section 603 of SECURE 2.0 removed the pre-tax option for catch-up contributions made by higher-paid participants. Treasury and the IRS issued final regulations on 16 September 2025, and the requirement applies from 1 January 2026, with plans expected to follow a reasonable good-faith interpretation in 2026 and the full detail of the regulations from 2027.

The rule works like this. If your wages subject to FICA from the employer sponsoring the plan exceeded a threshold in the prior calendar year, any catch-up contribution you make in the current year must be made as a Roth contribution — after tax, growing tax-free. The threshold was set at $145,000 in the statute and is indexed annually; it has already been adjusted upward, so confirm the figure that applies to your year with the IRS or your plan administrator.

The details determine who is actually caught:

Feature	How it works
Which wages count	FICA wages from the employer sponsoring the plan, not total household or investment income
Which year	The prior calendar year's wages set the current year's treatment
Per employer	The test is applied employer by employer, so changing jobs can reset it
No FICA wages	Partners and genuinely self-employed individuals without FICA wages generally fall outside the rule
Plan without a Roth option	A caught participant cannot make catch-up contributions at all until the plan adds one

That last row is the one that causes real disruption. The requirement does not merely change the tax treatment of the contribution; if the plan has no designated Roth account, an affected participant loses the ability to make catch-up contributions entirely. Most large plans have added Roth features in response, but smaller plans have not all caught up.

What the Roth requirement actually costs you

For an affected saver the change is a timing shift, not a penalty. A pre-tax catch-up reduces this year's taxable income and produces taxable income later. A Roth catch-up does the reverse: no deduction now, no tax on qualified withdrawals later.

An illustration, using round numbers purely to show the shape of the trade:

Suppose a saver in a 32% marginal bracket makes a $10,000 catch-up. Made pre-tax, it costs $6,800 of after-tax income and the full balance is taxable when withdrawn. Made as Roth, it costs the full $10,000 of after-tax income and nothing is taxable on qualified withdrawal. The Roth version therefore requires more cash flow now for the same headline contribution — which is the practical squeeze for someone already contributing to the limit.

These are illustrative figures only; your own bracket, state tax position, and plan features change the answer. Verify before acting.

Whether the shift helps or hurts depends on the comparison between your marginal rate now and the rate that will apply to withdrawals later. For someone in peak earning years expecting a lower retirement bracket, losing the deduction is a genuine cost. For someone expecting a similar or higher rate — because of a large pre-tax balance driving future required distributions, or the IRMAA surcharges those distributions can trigger — being forced into Roth may improve the long-run position.

There is also a portfolio argument. A saver with a large pre-tax balance and little Roth money has all their retirement income exposed to one future tax regime. Roth catch-ups build the other side, which makes the year-by-year withdrawal planning covered in retirement tax strategies more flexible.

Practical points that decide how much you can use

Check the plan document, not the statute. The higher age 60 to 63 catch-up and the availability of a Roth account are both plan design choices. Two people with identical income and age can have different options.

Watch the deferral schedule near year end. In plans that stop deferrals once the standard limit is reached, catch-up eligible participants sometimes have to elect the catch-up explicitly or adjust their contribution rate. Missed catch-ups are usually a payroll setup problem rather than a rules problem.

A job change mid-year affects the FICA wage test. Because the test looks at prior-year wages from the sponsoring employer, someone joining a new employer may not be treated as a high earner in that plan even at a substantial salary.

Do not confuse the 457(b) special catch-up. Governmental 457(b) plans have their own final-three-years-before-retirement catch-up, which cannot be combined with the age 50 catch-up in the same year. The larger of the two applies.

Catch-ups are not the only headroom. Where a plan permits after-tax contributions and in-plan conversions, the mega backdoor Roth route can add far more than a catch-up. It is a different mechanism with its own conditions, and it is worth checking before assuming the catch-up is your ceiling.

Where catch-ups fit in the wider picture

For most people the sequence has not changed: capture any employer match first, then use the tax-advantaged capacity that fits your bracket, then look at taxable accounts. Catch-ups extend the second step rather than replacing anything, and the account-by-account map in tax-advantaged retirement accounts still applies.

What has changed is that the extra capacity now arrives with a tax character attached for higher earners. The planning response is not to abandon the catch-up but to look at the whole picture: how large the pre-tax balance already is, what the Roth conversion plan looks like, and whether early access matters — a consideration for anyone weighing the rule of 55. Being pushed into Roth contributions is only a problem if the rest of the plan assumed otherwise.

Frequently asked questions

Do I have to be 50 on the day I contribute?

No. Eligibility is based on reaching age 50 by the end of the calendar year, so someone whose fiftieth birthday falls in December can make catch-up contributions throughout that year. The same end-of-year test applies to the age 60 to 63 window.

Can I make catch-up contributions to both a 401(k) and an IRA?

Yes. They are separate systems with separate limits, so an eligible saver can use both in the same year, subject to the usual IRA deductibility and income rules. The employer plan catch-up is much the larger of the two.

If I earn above the threshold, can I still make pre-tax catch-up contributions?

No. From 2026, catch-up contributions by participants whose prior-year FICA wages from the sponsoring employer exceeded the indexed threshold must be Roth. Ordinary elective deferrals up to the standard limit are unaffected and can still be pre-tax if the plan allows.

What if my plan does not offer a Roth account?

Then an affected participant cannot make catch-up contributions to that plan at all, because there is no compliant way to make them. Plans in this position generally need to add a designated Roth account. If yours has not, raise it with the administrator early in the year rather than in December.

This article is general education, not personal financial or tax advice. Contribution limits, the indexed wage threshold, and the indexed catch-up amounts change annually, and plan features vary. Confirm the current figures with the IRS and check your own plan document with the administrator before changing contributions.