S&P 500, Dow Jones Global ex-US, Gold, Bloomberg Commodity Index returns exclude reinvested dividends (gold does not pay a dividend) and the three-, five-, and 10-year returns are annualized; and the 10-year Treasury Note is simply the yield at the close of the day on each of the historical time periods.
Sources: Yahoo! Finance; MarketWatch; djindexes.com; U.S. Treasury; London Bullion Market Association.
Past performance is no guarantee of future results. Indices are unmanaged and cannot be invested into directly. N/A means not applicable.
THE RULES WILL CHANGE IN 2026. Since 2001, workers who are age 50 or older have been able to make catch-up contributions to their workplace retirement plans. As the name implies, the idea was to help people who are behind on saving for retirement catch-up by saving more. For example, if older plan participants reach the annual contribution limit of $22,500, then they can choose to contribute an additional $7,500 in catch-up contributions.
However, Secure 2.0 changed the rules for higher-income earners, reported Paul Mullholland in PlanSponsor.
Plan participants who earn $145,000 or more each year will no longer be able to make catch-up contributions to traditional plan accounts. Instead, higher-income earners in 401(k) and similar types of retirement plans must direct any catch-up contributions to Roth plan accounts.
As a reminder, contributions to traditional plan accounts are typically made with pre-tax dollars so they may help reduce the amount of taxes owed today. In addition, any earnings in traditional plan accounts grow tax deferred. Taxes are owed when a distribution is taken.
In contrast, contributions to Roth plan accounts are made with after-tax dollars. While there is no immediate tax benefit, the contributions and any earnings grow tax-free. Distributions are tax-free, too, after the account has been open for five years and the owner has reached age 59½.
The change was originally slated for 2024. However, many workplace retirement plans don’t have designated Roth accounts, which presents a problem for higher-income earners who want to save more. To give plan sponsors and administrators time to adjust to the new rules, the change will now take place in 2026.
Secure 2.0 also included an opportunity for older retirement plan participants to supercharge their savings efforts. In 2025, participants who are between the ages of 60 and 63 can make bigger catch-up contributions – either $10,000 or 50 percent more than the regular catch-up contribution amount for the year.
If you have any questions about retirement plan contributions or how to generate enough income to live comfortably in retirement, please get in touch.
Weekly Focus – Think About It
“[In retirement] we do have something we never had before: we have the added pressure of time. We can no longer wait around for the ideal opportunity. If we have not achieved our early dreams, we must either find new ones or see what we can salvage from the old. If we have accomplished what we set out to do in our youth, then we need not weep like Alexander the Great that we have no more worlds to conquer. There is clearly much left to be done, and whatever else we are going to do, we had better get on with it.”
—Jimmy Carter, former U.S. president