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Investing Blog Roundup: Roth Catch-Up Rule Delayed

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

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