The new rule affects employees aged 50 and over in 2026 whose total Boston College FICA wages in 2025 were over $150,000.

Starting in 2026 a new rule under the SECURE 2.0 Act will affect how some employees can make catch-up contributions to the retirement plan. The general contribution limit in 2026 will be $24,500, including the 2% 401(k) plan contributions and all 403(b) plan contributions combined. If someone will be age 50 or over at the end of 2026, there is an additional catch-up contribution limit of $8,000, and if someone will be age 60-63 at the end of the year there is another additional catch-up limit of $3,250. Thus, someone aged 50-59 (or aged 64+) could make contributions totaling $32,500, and someone aged 60-63 could make a maximum contribution totaling $35,750.

The new rule affects employees aged 50 and over in 2026 whose total Boston College FICA wages in 2025 were over $150,000 (as reported in Form W-2, Box 3). For those employees, any catch-up contributions must be made on a Roth after-tax basis to the 403(b) plan. For employees whose 2025 income was $150,000 or less, and for all employees under age 50, catch-up contributions may continue to be on a pre-tax and/or Roth after-tax basis.

Those who will be affected by the new rule will not need to complete a form electing the Roth catch-up option. Rather, in accordance with the SECURE 2.0 Act requirement, affected employees will be deemed to have elected the Roth basis for catch-up contributions.

However, anyone who prefers not to have catch-up contributions made on a Roth after-tax basis will need to complete a new Salary Reduction Agreement requesting us to limit contributions to the $24,500 level.

For those not familiar with the Roth 403(b) after-tax option, a principal advantage is that when the funds are withdrawn, presumably at retirement, not only are amounts from contributions not taxed (because they already were taxed), but all the earnings are also not taxed. The only stipulation is that the initial Roth contribution was made at least five years ago. Also, Roth accumulations are no longer subject to Required Minimum Distributions (RMDs) at age 73 and after.