In December 2022, the Setting Every Community Up for Retirement Act of 2022 (SECURE 2.0 Act) was signed into law. The retirement legislation includes significant changes that could help strengthen the retirement system and improve Americans’ financial readiness for retirement. Among a few changes, there is a new Roth Catch-up requirement for certain people. 

Starting in 2026, employees turning age 50 or older who earned more than $150,000* in the previous year (2025) must make any age 50 Catch-up contributions as after-tax Roth savings.  

This chart illustrates the new requirements and available options under SECURE 2.0 Act based on your income, age, and whether you make Catch-up contributions.

 Notes: 

*Based on 2025 FICA "Social Security wages" from box 3 of the 2025 MSU W-2 form.

**Based on the IRS 2026 limits. Ages are based on the age you will be on December 31, 2026. 

***The current pre-tax contribution and the new after-tax Roth option will be subject to the 2026 IRS limits for both their regular employee contributions ($24,500) and the Age 50 Catch-up ($8,000). 

Unlike traditional pre-tax contributions to a 403(b) or 457(b) account, after-tax Roth contributions allow you to withdraw that money tax-free once you retire. So, while you’re still paying taxes on your earnings now, you may enjoy a reduced tax obligation in the future.

Some considerations include the tax implications and timing requirements. First, Roth contributions are withheld after your taxes are deducted, meaning you will pay more in tax with each paycheck and receive less take home pay. Second, you must wait at least five years after your first after-tax Roth contribution, and you must be at least 59 ½ years old to make a tax-free withdrawal.  

Beginning in January, you can log into the EBS Portal and make changes to your 403(b) Supplemental and/or 457(b) Deferred Compensation accounts to move your current pre-tax contributions to the new after-tax Roth option. The 403(b) Base account will remain available only for pre-tax contributions.

If you make Catch-up contributions and you’re turning 60-63 anytime in the calendar year, MSU now offers a new option that allows your Catch-up amount to be higher than the standard Age 50 Catch-up amount. Once you reach the regular employee contribution limit in your MSU 403(b) Supplemental and/or 457(b) Deferred Compensation accounts, you can save $11,250 instead of the regular $8,000 limit for Age 50 Catch-up.