| Secure Act 2.0 considerations for year 2026 within eCMS Mandatory Roth Catch-Up Contributions for high earners, please understand that this will be a manual set up that will need to be identified and set up for these higher wage earners. Here is a summary of SECURE 2.0 Act for year 2026 and the manual requirement within eCMS to make those adjustments for high earners. Catch-up contribution limits for 2026 are subject to annual adjustments by the IRS. Based on projections and the SECURE 2.0 Act, here’s what to expect: Catch-up contributions for individuals aged 50 and over (standard) Expected Limit: Projections anticipate the standard catch-up contribution limit for individuals age 50 and over to increase to $8,000 in 2026. This is an additional contribution on top of the regular 401(k) contribution limit, which is projected to be $24,500 in 2026. Therefore, the total possible contribution for those aged 50+ would be $32,500 ($24,500 + $8,000). Catch-up contributions for individuals aged 60-63 (enhanced) The SECURE 2.0 Act introduced an enhanced catch-up contribution limit for individuals aged 60, 61, 62, and 63. Expected Limit: This enhanced limit is projected to remain at $11,250 in 2026, though it will be indexed for inflation starting that year. This enhanced catch-up is optional for retirement plans, and employers are not required to offer it. If your plan allows it, the total possible contribution for this age group would be $35,750 ($24,500 regular limit + $11,250 enhanced catch-up). Mandatory Roth Catch-Up Contributions for high earners Starting in 2026, individuals who earned $145,000 or more in FICA wages in the preceding year (2025 in this case) must make any catch-up contributions (both standard and enhanced) to a Roth plan, such as a Roth 401(k). This means these contributions are made with after-tax dollars, not pre-tax. If a plan doesn’t offer a Roth option and a high earner falls under this rule, they will not be able to make catch-up contributions at all. This rule was originally set to begin in 2024 but was delayed by the IRS until 2026 to allow time for plan sponsors and payroll providers to adjust their systems. The $145,000 income threshold will be indexed for inflation in future years. Important Notes: Consult official IRS website for specific clarification. Consult with your plan administrator or a financial advisor to determine the specific rules and limits applicable to your situation. Understanding these changes is crucial for planning your retirement savings strategy, especially if you are age 50 or over or a high-income earner. Within eCMS for high earners you will need to manually enroll them into the Roth catch up category at the beginning of the year. If Roth option is not available within the Plan, then they will not be able to make catch-up contributions at all. |