We want to make you aware of an important upcoming change under the SECURE Act 2.0
that may impact your retirement plan contributions beginning in 2027.
Currently, individuals age 50 and older can make “catch-up” contributions to their employer
retirement plans—such as 401(k)s—on top of the standard contribution limit. These
additional contributions are designed to help boost retirement savings as you approach
retirement.
What’s changing in 2027
- If you are a high-income earner making more than $145,000 annually, your catch-up
contributions must be made as Roth contributions (after-tax dollars). - If your employer’s retirement plan does not offer a Roth option, then catch-up
contributions will no longer be permitted.
What does this mean for you: - Those with income below $145,000 can continue making catch-up contributions as before
(traditional pre-tax or Roth, depending on plan rules). - Higher-income earners will need to plan for Roth treatment of these contributions, which
means no immediate tax deduction, but the funds can grow and be withdrawn tax-free in
retirement. - Employers who do not currently offer a Roth feature in their plans may need to adopt one
for employees to continue making catch-up contributions after 2027.
At ClearBridge Capital Group, our goal is to keep you informed about legislative changes
that may affect your financial plan. As we approach 2027, we will work with you to ensure
your retirement strategy remains optimized under these new rules.
If you have questions about how this change may affect your specific situation, please don’t
hesitate to reach out.
Sincerely,
Trisha McMahon
Founder & CEO | Financial Advisor
Helping you achieve clarity in your financial journey
ClearBridge Capital Group LLC
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