After delaying a rule requiring high-income 401(k) savers aged 50 or older to make catch-up contributions in Roth accounts, the IRS has signaled that it will take effect starting next year.
That gives financial advisers working with 401(k) sponsors or clients earning more than $145,000 less than two months to ensure a Roth account is available and help those clients decide whether to contribute to it, noted Jay Cirame, vice president of ERISA consulting at Sentinel Group, a Wakefield, Massachusetts-based registered investment advisory firm. The IRS confirmed in September that traditional 401(k) plan catch-up contributions will no longer be available for those above the income threshold, after its 2023 relief from the rule pushed the Secure 2.0 Act provision’s effective date to 2026.
