Secure Act 2.0
Effective January 1, 2026
Section 603 of the Secure Act 2.0 of 2022 changes how catch-up contributions work for certain higher-earning employees:
- If an employee earned more than $145,000 in FICA wages from their employer in the previous calendar year, any catch-up contributions they make must be Roth (after-tax) contributions. Your FICA wages can be found in Box 3 of your Form W-2.
- If an employee earned $145,000 or less, they can still choose to make catch-up contributions on a pretax or Roth basis, depending on plan options.
What is the catch-up contribution?
Catch-up contributions can help older individuals save more as they near retirement. Participants who are aged 50 and older can elect to contribute an additional amount to their retirement account, known as a catch-up contribution.
Three catch-up contribution options:
- Those age 50+ can contribute the IRS deemed amount each year
- Individuals are are ages 60-64 are allowed a super catch-up amount
- Employees who qualify may be eligible for a lifetime 15-year catch-up
How these updates may affect your plan
If you meet the wage requirement and choose to contribute any catch-up amounts, those contributions will automatically be placed in a Roth TDA account unless you’re already enrolled in one.
Employees can change their TDA plan and election amounts at any time.