SECURE 2.0 Act
The SECURE 2.0 Act (Setting Every Community Up for Retirement Enhancement) is a federal law created to make it easier to save for retirement. It is designed to modernize retirement plan rules, giving employees new ways to save, catch up, and stay financially secure for retirement.
SECURE 2.0 consists of dozens of sections, and each section represents a separate provision (rule change) to retirement related laws. Together, all of the sections make up the entire Act.
Section 603 General Questions
What is changing?
Beginning January 1, 2026, the IRS will require that catch-up contributions for employees who earned more than $145,000 in the prior year be made on a Roth (post-tax) basis.
What is a catch-up contribution?
If you’re age 50 or older, the IRS allows you to make extra contributions to your Supplemental Retirement Account (SRA) — above the regular annual limit — to help you save more for retirement.
Does this affect everyone?
No. This change only applies if you:
- Are age 50 or older, and
- Earned more than $145,000 in the previous calendar year.
- Employees below that income level or those not making catch-up contributions will not be affected.
What if I don't make catch-up contributions?
Nothing changes for you. You can continue to contribute to your SRA on a pre-tax or Roth (post-tax) basis, depending on your current elections.
Why is this happening?
This change comes from Provision 603 of the federal SECURE 2.0 Act, which was passed to expand retirement savings opportunities and modernize plan rules.
What does "Roth (post-tax)" mean?
Roth contributions are made after taxes are withheld from your paycheck. The key benefit is that qualified withdrawals in retirement are tax-free, since taxes are paid upfront rather than when funds are withdrawn.
How is the $145,000 threshold determined?
The threshold is based on your wages subject to FICA (Social Security taxes) from your employer in the prior calendar year. For example, your 2025 earnings will determine whether the rule applies to your 2026 catch-up contributions.
Will the $145,000 amount ever change?
Yes. The IRS will adjust this amount annually for inflation, so the income threshold may increase slightly each year.
When does the new rule take effect?
The new rule applies to tax years beginning on or after January 1, 2026. Catch-up contributions made in 2025 or earlier are not affected.
What if I work multiple jobs or move between institutions?
The $145,000 income threshold is determined by each employer separately. So, your WVU earnings alone determine whether the Roth rule applies to your WVU SRA contributions.
Can I still make regular pre-tax contributions?
Yes. You can continue to make pre-tax contributions up to the standard IRS annual limit. The rule only affects catch-up contributions for those who exceed the income threshold.
Why did Congress make this change?
Provision 603 of the SECURE 2.0 Act aims to increase tax revenue upfront and encourage after-tax savings options. It’s also designed to help employees diversify their retirement tax strategy between pre-tax and post-tax savings.
What if I prefer pre-tax catch-up contributions?
After 2025, employees whose prior-year wages exceed the IRS threshold of $145,000 cannot make pre-tax catch-up contributions. All catch-up contributions for this group must be Roth (post-tax).
Do I need to do anything right now?
No. This rule won’t take effect until 2026. We’re sharing this information early so employees can understand what’s coming and plan accordingly. WVU will provide additional details as we approach the effective date.
Where can I get help understanding my options?
You can schedule a free, confidential financial consultation with TIAA through the WVU Benefits Strategy website, or contact your personal tax advisor to discuss how this change may affect your individual tax situation.
Note: The information on this webpage is provided for educational purposes only and should not be considered tax or investment advice. Please consult with your financial or tax advisor regarding your personal circumstances.