DECEMBER 2025 Newsletter: Secure Act 2.0 Catch-Up Contributions

The SECURE 2.0 Act made two primary changes to retirement plan catch-up contributions: creating an optional"super catch-up" contribution limit for ages 60-63that began in 2025, and implementing amandatory Roth contribution rule for high earnersstarting in 2026.

2025 Catch-Up Contribution Limits

For 2025, individuals aged 50 and older can make standard catch-up contributions to their workplace retirement plans. A new, higher limit is available for a specific age bracket.

• The "super" catch-up limit of $11,250 is optional for employers; they must specifically decide to offer this feature in their plan. Check with your plan sponsor to confirm availability.
  
  
• For SIMPLE IRAs, the standard catch-up limit is $3,500, and the age 60-63 limit is $5,250 for 2025.
  
  
• For IRAs, the catch-up contribution limit is $1,000 for those age 50 and older for 2025.

You can still make 401(k)/403(b) catch-up contributions until the end of the plan/calendar year, but IRA contributions extend to the tax deadline (usually April 15th) of the following year. Always check your specific plan's rules with your workplace administrator.

2026 Mandatory Roth Rule

Another significant change under SECURE 2.0 is the requirement for high-income earners to make employer retirement plan catch-up contributions on an after-tax Roth basis only --effectiveJanuary 1, 2026.

• For 2025: All eligible participants can continue to make catch-up contributions on either a pre-tax or Roth basis, regardless of income.
  
  
• Effective 2026: Participants who earned more than $150,000 in FICA wages in the prior year (2025 wages for 2026 contributions) must make their catch-up contributions as Roth contributions. (The initial statutory threshold was $145,000, which has been adjusted for inflation for the 2026 tax year).  
  
  
• If an employer plan does not offer a Roth option, affected high earners will be unable to make any catch-up contributions starting in 2026, unless the plan is amended.

The rule impacts high-wage earners by shifting their catch-up savings strategy from pre-tax to after-tax. Those who might benefit from the mandatory Roth rule include individuals who expect to be in a similar or higher tax bracket in retirement, desire tax diversification, and wish to maximize contributions with a portion being tax-free in retirement. Participants aged 60-63 may be eligible for the higher catch-up contribution limit, which also falls under this rule for high earners.

There are several factors to consider when deciding whether to make Roth catch‑up contributions, including your age, time horizon, income tax bracket, and how long it may take to recover the upfront taxes based on a reasonable assumed rate of return. That said, after reviewing scenarios for clients in the highest tax brackets, we generally find that Roth catch‑up contributions can still be a viable strategy.

That noted, the right choice is always specific to your situation. If your income exceeds $150,000 for 2025, we recommend discussing the variables with your advisor to determine whether an employer‑sponsored retirement plan Roth catch‑up contribution aligns with your broader financial plan.

^{This information is not a substitute for individualized tax advice. Please discuss your specific tax issues with a qualified tax professional.} 

^{More information available atirs.gov}

^{Guidance on Section 603 of the SECURE 2.0 Act with Respect to Catch-UpContributions}

^{Treasury, IRS Issue Final Regulations on New Roth Catch-Up Rule, Other Secure 2.0 Act Provisions}

• With tax season around the corner, we offer our Investors Guide for Tax Season 2025-2026as well as the updatedTax Season 2025-26 section of our FAQ page.  Here you will find information relating to the delivery and access of your upcoming tax statements.
  
  
• It is with mixed emotions that we announce thatJulie McHughhas announced her retirement after fifteen years as Advisor Assistant to Mary Butler-Aldrich and four years as a valued member of our CRF team. Julie will be deeply missed, but we are so excited for all of her new adventures ahead! Please join us in congratulating Julie and wishing her happiness, good health, and fulfillment in the years to come.
  
  
• 2026 is on the horizon, and we would like to take this moment to express our heartfelt gratitude for your business. From our CRF family to yours, we hope you and your loved ones have a wonderful holiday season and upcoming year filled with new possibilities, opportunities, good health, and happy times.

5 Things You Can Find on IRS.gov

The IRS website offers a wealth of information beyond just tax filing information. Here are some things you can find on the site that might help you as a taxpayer:

1. The Taxpayer Bill of Rights - This set of fundamental rights tells you what to expect when dealing with the IRS.
2. Resources on how to apply for 501(c)(3) status - There are webinars and resources to help organizations apply for and maintain their tax-exempt status.
3. Information on IRS tax volunteer opportunities - Learn how to give back and help people file their taxes
4. Information on the latest tax scams - Know what to look out for and how to stay safe
5. The Interactive Tax Assistant - Get personalized answers to your tax questions

^{This information is not a substitute for individualized tax advice. Please discuss your specific tax issues with a qualified tax professional.}

^{Tip adapted fromIRS.gov}

AI Is Making Online Shopping Scams Harder To Spot

Think you can spot a scam? With AI, it’s getting a lot harder. Today’s online shopping scams are powered by artificial intelligence, making fake websites look polished and convincing. Scammers now use AI to create: - Believable product listings and fake reviews - Deepfake influencer videos that promote fraudulent sites - Near-perfect website addresses that mimic trusted retailers.

 🛑 Before clicking “add to cart,” take a second look:

✅ Double-check URLs for misspellings

✅ Avoid shopping directly through social media links

✅ Use credit cards for added fraud protection

Scammers are moving fast—but awareness helps slow them down. 

^{Source:https://www.cbsnews.com/news/how-to-spot-ai-online-shopping-scams/}

Christine likes grapes but not potatoes. She likes squash but not lettuce, and peas but not onions. Following the same rule, will she like pumpkins or apples?

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Last Month's Riddle: A father tells his young son, “I will pay you $6.00 per hour for the 6 seconds you took to wash your hands before dinner.” So, how much does the boy earn for these 6 seconds of effort?

Answer:One cent. At a rate of $6 paid per 60 minutes, $6 divided by 60 works out to 10 cents a minute. Six seconds is one-tenth of a minute, so the boy earns 1 cent.