A delayed provision of the SECURE 2.0 Act will take effect in 2026, requiring certain high-income workers to make 401(k) catch-up contributions exclusively to Roth accounts. The IRS confirmed that starting Jan. 1, employees aged 50 or older earning more than $145,000 in wages will no longer be permitted to direct catch-up contributions into traditional pre-tax 401(k) accounts. 

According to Yahoo Finance, the rule was originally set to begin in 2024 but was postponed to allow plan sponsors and payroll providers time to adjust their systems. That transitional period ends at the close of 2025. 

Industry groups had expressed concern about the timeline, noting that many record keepers were not yet equipped to handle Roth contributions for catch-up purposes. According to IRS guidance, plan sponsors and service providers are expected to apply the new rule using good faith efforts and reasonable procedures. 

The only rule change only affects employees with compensation over the $145,000 threshold in the prior year and applies solely to catch-up contributions, regular 401(k) contributions are not impacted. Plans that do not offer a Roth 401(k) option will not be able to accept catch-up contributions from these participants in 2026 unless they update their plan design before the effective date.