Catch-Up Contributions in 2026: What SECURE 2.0’s New Roth Rules Mean for You

Beginning January 1^st, 2026, one of the most significant retirement savings shifts in decades took effect under the SECURE 2.0 Act. If you are age 50 or older and earn over $150,000 USD per year, changes to how you can make catch-up contributions with your employer retirement plan will take place. If you are between ages 60 and 63, the impact is even more meaningful due to newly enhanced “Super Catch‑Up Contributions.”

Catch-Up Contributions (age 50-59, 64+)

Catch‑up contributions allow employees who are 50 and above to save beyond the regular annual 401(k), 403(b), governmental 457(b), and Thrift Savings Plan (TSP) limit, which in 2026, increased to $24,500. The regular catch‑up limit for 2026 is $8,000, making for a total maximum employee contribution with catch-up of $32,500 in 2026 for those who are 50+.

Super Catch-Up Contributions (age 60-63)

That said, for those who are 60-63 years old only, SECURE 2.0 introduced a special enhanced catch-up limit known as the “Super Catch-up Limit,” which is $11,250 in 2026, making for a total maximum employee contribution with catch-up of $35,750 in 2026 for those who are 60 – 63.

Roth Catch-Up Begins in 2026

If your W2 income was over $150,000 USD in 2025, all catch-up contributions must be made on a Roth basis, instead of pre-tax, which means that your catch-up contributions will be after-tax and qualified withdrawals in retirement from this Roth bucket will be tax‑free. Employers who previously did not offer a Roth account in their retirement plan needed to create that option on the basis of this rule change. That said, it is possible that your employer simply decided to block catch-up contributions altogether instead of opening up the Roth option.

If you change employers within the same year, there is a reset, and you are not subject to Roth contributions in the first year of employment. With the new employer, you can benefit from both pre-tax 401K catch-up and super catch-up contributions.

Cross-Border Impact for Expats

For US expats living in Canada but working for a US employer on a W‑2, the 2026 SECURE 2.0 catch‑up rules introduce an additional layer of complexity. Although you may be physically resident in Canada, you remain a US tax resident and must continue filing U.S. tax returns. This means the new SECURE 2.0 Roth catch‑up mandate applies to you fully. Since W‑2 wages from a US employer are still subject to Social Security calculations regardless of where you live, the income threshold test applies the same way it does for employees living in the US.

That said, as a general note, US expats in Canada earning W2 income from a US employer should typically not participate in pre-tax 401k contributions and should focus on RRSP contributions instead to benefit from the much needed Canadian tax deduction instead which avoids double tax exposure from contributing to a pre-tax US retirement account and not getting a Canadian deduction.

Roth IRAs and the CRA Election Requirement

US expats in Canada must also navigate additional complications when it comes to Roth IRAs. Under the U.S. tax code, Roth IRAs grow tax‑free, and qualified withdrawals are tax‑free in retirement. From Canada’s perspective, a Roth IRA is not automatically tax‑free. To preserve its tax‑exempt status, expats must file a one‑time CRA election in the first year they become Canadian tax residents. Without this election, Canada treats the Roth IRA as a taxable investment account, meaning annual growth becomes subject to Canadian taxation even though the US still views the account as tax‑free.

If a US expat contributes to a Roth IRA after becoming a Canadian resident, the account permanently loses its protected status in Canada. This means all future Roth IRA gains, interest, dividends, and capital appreciation, become taxable every year on the Canadian return. Once contaminated, the Roth IRA cannot be “fixed” in Canada, even if you stop contributing. Fortunately, the Roth 401K does not require a one-time election and is automatically tax-free in Canada.

Beginning in 2026, high‑income expats who make Roth catch‑up and super catch-up contributions under SECURE 2.0 may accidentally trigger Canadian tax exposure if those contributions later get transferred to a Roth IRA. Without careful planning you can create a non‑compliant Roth IRA from a Canadian perspective.

This is why expats must coordinate cross‑border tax planning carefully. In some cases, it may be preferable not to roll a Roth 401(k) into a Roth IRA after moving to Canada and to ensure any rollovers are done prior to the move.