SECURE 2.0 Alert: High Earners Face New Roth Catch-Up Requirements in 2025

by | Oct 7, 2025

ARTICLE | October 07, 2025

 

Are you earning $145,000 or more and planning to make catch-up contributions to your 401(k)? The SECURE 2.0 Act has introduced a significant change that could impact your retirement strategy and tax planning approach.

Starting in 2025, employees aged 50 and older who earned more than $145,000 in the previous calendar year must make all catch-up contributions to their employer-sponsored retirement plans on a Roth (after-tax) basis. This represents a fundamental shift from the traditional pre-tax catch-up contributions that many high earners have relied upon for tax savings.

"This change creates both challenges and opportunities for our high-net-worth clients," explains Jennifer Sicking, Managing Partner at KHA Accountants. "While losing the immediate tax deduction may seem disadvantageous, the long-term benefits of tax-free growth and distributions could be substantial for those in higher tax brackets."

The implications extend beyond simple contribution mechanics. High earners must now ensure their employer's plan offers a Roth option, as plans without this feature cannot accept catch-up contributions from affected employees. Additionally, this rule creates a unique planning opportunity for those earning just above the $145,000 threshold, who may benefit from strategic income timing to optimize their contribution options.

Enhanced catch-up opportunities also debut in 2025. Employees aged 60-63 can now contribute up to $11,250 in catch-up contributions (compared to the standard $7,500), providing a significant boost during critical pre-retirement years. However, high earners in this age range must make these enhanced contributions on a Roth basis as well.

Take Action Now
The transition period ends after 2025, making this year crucial for preparation. Contact KHA Accountants to schedule a comprehensive retirement planning review and ensure your strategy aligns with the new SECURE 2.0 requirements. Our specialized expertise in high-net-worth tax planning ensures you'll maximize these changes while minimizing any adverse impacts.

 

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