According to the Federal Reserve, Americans between 55 and 64 had a median of $185,000 in retirement accounts in 2022. That number represents just one of many alarming retirement stats that might concern you. Northwestern Mutual says the target for a comfortable retirement in 2025 should be closer to $1.26 million. The gap is huge and, to close it, many older workers are boosting their retirement savings with catch-up contributions to accelerate their savings beyond standard limits.
But big changes are now reshaping how wealthier seniors save. On September 15, 2025, the U.S. Department of the Treasury and the IRS issued final regulations that redefine some of the biggest retirement savings changes coming in 2025. Under the SECURE 2.0 Act, starting in 2026, upper class seniors will have to channel catch-up contributions into Roth (after-tax) accounts instead of traditional pre-tax ones.
High earners will pay taxes on those contributions right away. They’re giving up deductions now for tax-free money later in retirement. This change affects 401(k) and 403(b) plans, plus governmental 457(b) plans. IRA catch-up contributions stay the same, though — no Roth rule there. Plan admins and employers must update plan documents and payroll systems to implement these changes, ensuring compliance and helping participants avoid the kind of common 401(k) mistake that could cost you a fortune.
Read more: Retirees Are More Likely To Run Out Of Money If They Make These Mistakes
The effects of the new catch-up rules depend on your age and income. The contribution setup splits savers into two age tiers: The IRS reported that the standard catch-up contribution limit remains $7,500 for those aged 50 and older, but workers between the ages of 60 and 63 can contribute up to $11,250 in catch-up contributions if their plan allows. The difference is how these dollars get taxed. For example, a 62-year-old earning $150,000 in 2025 can put the regular $23,500 into a 401(k) on a pre-tax basis and keep the current-year deduction. But the enhanced $11,250 catch-up has to go into a designated Roth account, so they pay taxes immediately with no offsetting deduction.
Who gets affected depends on a specific wage test. Look at W‑2 Box 3, which lists a worker’s Social Security wages. If that number reads more than $145,000, then these changes apply to you. Though, notably, if you switched jobs, pay from past employers is excluded. Only aggregate wages from your current plan-sponsoring employer count toward the threshold. That detail creates an operational to-do for employers.
