One of the many changes made by the SECURE Act 2.0 was that, starting in 2024, catch-up contributions to 401(k), 403(b), and governmental 457(b) plans would have to be Roth (rather than tax-deferred) for any employee whose wages from the employer in question in the prior year were more than $145,000.
Many employers and plan administrators complained, arguing that they wouldn’t be able to implement the necessary systems in time. (Previously, catch-up contributions to such plans weren’t even allowed to be Roth, so there’s a bunch of software-related work to be done.)
The IRS recently agreed that more time was needed and announced that the new requirement won’t go into effect until 2026:
IRS Announces Administrative Transition Period for New Roth Catch Up Requirement from the IRS
Other Recommended Reading
Thanks for reading!
New to Investing? See My Related Book:
|
Investing Made Simple: Investing in Index Funds Explained in 100 Pages or Less
|
Topics Covered in the Book:
- Asset Allocation: Why it’s so important, and how to determine your own,
- How to to pick winning mutual funds,
- Roth IRA vs. traditional IRA vs. 401(k),
- Click here to see the full list.
A Testimonial:
“A wonderful book that tells its readers, with simple logical explanations, our Boglehead Philosophy for successful investing.”
– Taylor Larimore, author of The Bogleheads’ Guide to Investing
September 11, 2023
