The Roth Catch-Up Rule Starting in 2027: Who Must Use It

A new retirement-plan rule is arriving. Some workers who are 50 or older and earn above a set amount will no longer be able to make their extra "catch-up" savings with pre-tax dollars. They will have to use a Roth account instead. This guide explains the rule in plain English, who it covers, and what is still left to your plan and your tax professional.

This is general education, not personal tax advice. Parts of this rule are interpretations of detailed regulations. Your plan's own rules and your tax situation decide what applies to you, so check with your plan administrator and a qualified tax professional. For the bigger picture, see our retirement planning guide.

What is the Roth catch-up rule?

A catch-up contribution is extra money that people age 50 or older can put into a workplace plan such as a 401(k) on top of the regular limit. The IRS catch-up page gives the 2026 amount as $8,000 for most plans.

A "Roth" contribution is made with money that has already been taxed. A traditional (pre-tax) contribution is not taxed when you put it in. The SECURE 2.0 Act added a rule that certain higher-income participants must make catch-up contributions as Roth. The IRS release on the final regulations describes it as "requiring that catch-up contributions made by certain higher-income participants be designated" as after-tax Roth contributions.

Who must make catch-up contributions as Roth?

According to the final regulations, the rule applies when a catch-up eligible participant's FICA wages from the plan sponsor (the employer that sponsors the plan) for the prior year are above the "Roth catch-up wage threshold." FICA wages are the wages subject to Social Security and Medicare tax. The regulations measure them by "the prior year FICA wages reported in Box 3 of Form W-2."

The threshold started at $145,000 and is adjusted for inflation. In Notice 2025-67 the IRS says it "is increased from $145,000 to $150,000" for the 2025 wage year, which is used for deciding whether 2026 catch-up contributions must be Roth. We did not find an official figure for the 2027 test, so we do not state one. Check the IRS notice on 2027 limits when it appears.

Sources: Federal Register final regulations and Notice 2025-67.

Does the wage test look at all my jobs?

The IRS release says the final regulations let a plan administrator aggregate wages a participant received in the prior year from certain separate common law employers when deciding whether the rule applies. It does not give more detail, and we did not read every part of the regulation text, so ask your plan administrator how your plan counts wages.

When does the rule start?

The final regulations generally apply to contributions in "taxable years beginning after December 31, 2026," which means 2027 for calendar-year plans. Before that, the regulations say "a reasonable, good faith interpretation standard applies." The IRS release also says certain governmental plans and plans under collective bargaining agreements have a later date.

The IRS catch-up contributions page says the requirement applies from 2026 for plans with Roth features and gives $150,000 as the 2026 threshold. That differs in wording from the regulations' 2027 date. The IRS release also says the regulations do not extend or change the transition period under Notice 2023-62, which generally ends December 31, 2025, and that a reasonable, good-faith interpretation applies for years before 2027. In our reading, 2026 is therefore a good-faith compliance year and 2027 is the date the final rules firmly apply, but this is an interpretation, not a legal conclusion. Your plan administrator can tell you what your plan does and when.

What if my plan has no Roth option?

The regulations say catch-up contributions are not permitted under a plan unless the plan lets catch-up eligible participants make them as designated Roth contributions. A plan without a Roth program is not required to adopt one, but then it may need to exclude subject participants from catch-up contributions. The regulations also note that excluding certain highly compensated employees may raise a separate nondiscrimination issue. These are plan-design questions for the employer and its advisers.

Can my plan make the choice for me?

A plan may provide in its documents that a subject participant is deemed to have irrevocably designated catch-up contributions as Roth. The regulations say this applies only if the participant has an effective opportunity to make a different election, and the deemed election must stop within a reasonable period after the participant is no longer subject to the rule.

What happens if pre-tax catch-up money goes in by mistake?

The regulations add two correction methods for pre-tax deferrals that violate the rule: a Form W-2 correction method and an in-plan Roth rollover correction method. We did not read the full deadlines and conditions, so ask the plan administrator or a tax professional if this happens to you.

How is this different from the ages 60 to 63 limit?

They are separate rules. The higher catch-up limit for ages 60 to 63 is $11,250 for 2026 according to IRS release IR-2025-111, compared with $8,000 for other catch-up eligible participants. The Roth rule is about how catch-up money is designated, not how much. The regulations say the higher amount applies to participants who attain age 60 but not 64 by year-end, and we did not find a source that exempts the higher amount from the Roth rule, so ask your plan administrator how it applies to you.

Does this affect IRAs?

The IRS catch-up page lists a separate IRA catch-up of $1,100 in 2026. None of the sources we read say the Roth requirement applies to IRA catch-up contributions. The regulations we read are about employer plans and do not discuss IRAs.

What does a Roth catch-up mean in dollars?

Here is a simple, made-up example, not a forecast or advice. Suppose a plan's rules treat a participant as subject to the rule, and the participant wants to contribute $8,000 of catch-up money. Before, that $8,000 could be pre-tax. Under the rule it must go in as Roth, which means it is made with after-tax money, so the pre-tax benefit of that $8,000 is lost. Whether Roth or pre-tax is better depends on tax rates now and later, which no article can decide for you.

Where do gold and silver IRAs fit?

The Roth catch-up rule applies to workplace plan contributions. A gold or silver IRA is an individual retirement account, a different type of account with its own rules, fees and price risk. Some people hold precious metals as one part of their retirement savings; others do not. Nothing here predicts any price.

If you consider one, the rules matter. According to the IRS collectibles page, a collectible bought by a qualified plan account is treated as a distribution equal to its cost, and the page says the same restrictions also apply to IRAs. It describes an exception for gold, silver, platinum or palladium bullion of a certain fineness when a bank or approved non-bank trustee keeps physical possession. See our collectibles rule guide, gold IRA guide, fee guide and risk guide.

What we did not check

We read only the first 100,000 of about 117,000 characters of the final regulations, so their applicability-date and correction-deadline details are not fully checked, we did not review rules for highly compensated employees with self-employment income, and we did not find an official 2027 wage threshold. The IRS release page is marked archival. Rules may change, so confirm with the IRS and a tax professional.