The SECURE 2.0 Act of 2022 added a handful of provisions that quietly reshape payroll administration. Section 109 is one of the biggest: for a four-year window — ages 60, 61, 62, and 63 — eligible workers can contribute substantially more to their 401(k) than either the standard limit or the ordinary age-50 catch-up would allow. In 2026, that extra room is $11,250, which is 50% more than the standard $7,500 catch-up and brings a 60-to-63-year-old’s maximum total 401(k) contribution to $35,750.
The rule sounds simple. The payroll administration around it is less so. Here’s what payroll pros need to know.
The short version
- Who qualifies: 401(k), 403(b), and governmental 457(b) participants who are ages 60, 61, 62, or 63 at any point during the plan year.
- How much extra: The greater of (a) $10,000 or (b) 150% of the age-50 catch-up amount for that year, indexed for inflation.
- In 2026: 150% × $7,500 (the standard catch-up) = $11,250. Since $11,250 exceeds $10,000, the enhanced limit is $11,250.
- Replaces, not adds: The enhanced catch-up replaces the standard $7,500 catch-up for eligible ages — it is not added on top.
- Effective date: Plan years beginning after December 31, 2024 (so 2025 was the first eligible year).
The math, worked out
For a 62-year-old 401(k) participant in 2026:
| Contribution type | Amount |
|---|---|
| Base elective deferral limit | $24,500 |
| Enhanced catch-up (60–63) | $11,250 |
| Maximum employee contribution | $35,750 |
Compare to a 58-year-old colleague:
| Contribution type | Amount |
|---|---|
| Base elective deferral limit | $24,500 |
| Standard age-50 catch-up | $8,000 |
| Maximum employee contribution | $32,500 |
The 60-to-63 window gives an extra $3,250 of deferral room in 2026 — $11,250 minus $8,000. Over four years, that’s up to $13,000 of additional pre-tax (or Roth) contribution space if the employee maximizes each year.
The age-64 cliff
The enhanced catch-up is for ages 60 through 63 only. At age 64, the employee drops back to the standard age-50 catch-up ($8,000 in 2026). This is a surprising feature of the rule — at 64 and 65 you lose the boost you had at 63 — and it creates a one-year planning window to max out contributions before reverting to the standard catch-up.
The age is measured at any point during the plan year. A participant who turns 60 on December 31 qualifies for the whole year.
The Roth mandate
SECURE 2.0 originally required that all catch-up contributions by “highly-earning” employees (those who earned over $145,000 from the sponsoring employer in the prior year, indexed for inflation) be made on a Roth basis. The IRS delayed this mandate, and it now takes effect for plan years beginning on or after January 1, 2026. Final regulations are effective in 2027, with “reasonable good-faith compliance” accepted through the end of 2026.
Beginning with the 2026 plan year, if you administer a 401(k), 403(b), or governmental 457(b) plan, you’ll need to:
- Identify which active participants earned more than the indexed threshold in the prior year.
- Ensure those participants’ catch-up contributions — both standard and the 60–63 enhanced — are routed as Roth (after-tax), not pre-tax.
- Reject or re-characterize any pre-tax catch-up election for those participants.
Plans that do not offer Roth contributions at all can either add a Roth option or prohibit highly-compensated employees from making catch-up contributions entirely. Most sponsors are adding Roth.
Administration checklist for payroll
- Confirm your plan document allows the enhanced catch-up. The provision is optional for sponsors — some plans have not yet been amended.
- Segregate catch-up eligibility in your payroll system. The system needs to recognize ages 50–59, 60–63, and 64+ as three distinct contribution buckets.
- Communicate the 60–63 window to eligible employees before year-end. Many are unaware the extra space exists.
- Prepare for the Roth catch-up mandate — it’s live now. For plan years beginning on or after January 1, 2026, high earners (prior-year wages from the sponsoring employer over the indexed $145,000 threshold) must make catch-up contributions Roth. Plan documents must be amended by December 31, 2026. Payroll code and communications need to align with good-faith compliance through 2026 and full compliance with final regulations in 2027.
- Watch the $72,000 Section 415(c) overall limit. The employee deferral + employer match + forfeitures cannot exceed $72,000 in 2026. An employee maxing the $35,750 enhanced deferral still has room for $36,250 of employer contributions before hitting 415(c).
Frequently asked questions
What is the SECURE 2.0 enhanced catch-up contribution?
A special catch-up contribution available only to 401(k), 403(b), and governmental 457(b) participants aged 60 through 63. The amount is the greater of $10,000 or 150% of the standard age-50 catch-up — $11,250 in 2026.
What is the 2026 enhanced catch-up amount?
$11,250. This is 150% of the standard $7,500 age-50 catch-up.
Is the enhanced catch-up in addition to the standard $7,500 catch-up?
No. The enhanced catch-up replaces the standard catch-up for eligible ages (60–63). A 61-year-old does not get both $7,500 and $11,250 — they get $11,250.
What’s the maximum a 62-year-old can contribute to a 401(k) in 2026?
$35,750. That’s the $24,500 base elective deferral plus the $11,250 enhanced catch-up.
Does the enhanced catch-up apply to SIMPLE IRAs or IRAs?
SIMPLE plans have their own 150% enhanced catch-up for ages 60–63 under SECURE 2.0 Section 109. Traditional and Roth IRAs are governed by separate rules and do not have an age-60-to-63 enhancement.
What happens at age 64?
The enhanced catch-up stops. The participant reverts to the standard age-50 catch-up ($8,000 in 2026).
When does the Roth catch-up mandate for high earners take effect?
Plan years beginning on or after January 1, 2026. High-earning participants (prior-year wages from the sponsoring employer over the indexed $145,000 threshold) must make all catch-up contributions Roth (after-tax). Final regulations are effective 2027, with IRS accepting reasonable good-faith compliance through the end of 2026.
Keep learning
- Additional Medicare Tax (0.9%): When and How Employers Withhold
- W-2 Box 12 Codes Explained — Codes D and AA for traditional vs. Roth 401(k)
- 2026 Payroll Figures Quick Reference
- Payroll Concepts hub — all payroll topics in one place
Practice with PrepToPay
The SECURE 2.0 enhanced catch-up is one of the freshest topics on the CPP exam, and PrepToPay’s bank includes multi-step calculations that walk through the 60–63 window, the 415(c) overall limit, and the upcoming Roth catch-up mandate. Start your 14-day free trial on FPC or CPP. A valid payment method is required at signup; you will not be charged during the trial. Reference is $9.99/month with no trial.
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