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Everything employers need in their retirement plan utility belt to take on 2026 rule changes, unlock powerful new tax credits, and capitalize on 2025 plan opportunities.
As we enter a new year filled with planning deadlines, tax-savings opportunities, and regulatory changes, now is the time for business owners and advisors to take action. As more provisions of the SECURE 2.0 Act take effect,the environment for expanding retirement plan access, while delivering some ofthe most impactful tax incentives we’ve ever seen, has never been better.
Consider this your mission briefing. Here’s what you need to know:
1. The Big Change Coming in 2026: Mandatory Roth Catch-Up Contributions
One of the most widely discussed provisions of SECURE 2.0 becomes effective on January 1, 2026.
What’s Changing?
Beginning in 2026, all catch-up contributions made by certain employees must be Roth(after-tax). This requirement applies only to:
- Employees age 50 or older in 2026
- Who earned more than $150,000 in FICA wages in 2025
- Participating in 401(k), 403(b), or governmental 457(b) plans
These employees cannot make pre-tax catch-up contributions. Lower-earning employees who fall below the wage threshold may still choose between pre-tax and Roth.
What Stays the Same?
- The rule does not apply to SIMPLE IRAs.
- The special 15-year service catch-up for 403(b) participants is not affected (although age-50 catch-ups in 403(b)s are).
- Standard contribution and catch-up limits still apply.
What Employers Need to Do
Plan sponsors should begin updating their “toolkit” by:
- Ensuring your plan allows Roth catch-ups
- Updating payroll and recordkeeping systems to identify employees crossing the $150,000 threshold
- Preparing participant communications well before 2026
2. SECURE 2.0 Tax Credits: A Powerful Incentive to Start a Plan
For small businesses, SECURE 2.0 enhanced a suite of tax credits that make starting a 401(k) plan more affordable than ever. In many cases, these credits can offset the majority—if not all—of the plan’s early administrative costs.
Here’s a breakdown of the tax-credit “tools” available.
1. Startup Cost Credit — Up to $5,000 per Year
This credit helps cover the initial setup and administration costs of establishing a retirement plan.
Eligible employers may receive:
- Up to $5,000 per year depending upon the number of participating employees
- For the first three plan years
- With 100% of set-up and administration costs covered for employers with ≤50 employees
2. Employer Contribution Tax Credit — Up to $1,000 per Employee
This provision of SECURE 2.0 encourages employers to make contributions to employee accounts.
- Up to $1,000 per employee
- For employees earning less than $100,000
- Applies for five years, with a gradual phase-out
- For employers with ≤50 employees
3. Automatic Enrollment Credit — $500 per Year
If your plan includes automatic enrollment, something required for most new plans starting in 2025, you may qualify for:
- A $500 annual credit
- For the first three years
- For employers with ≤100 employees
These credits can stack, making 2025 an incredibly cost-efficient time to start a plan.
For a full breakdown, read our complete tax-credit blog here.
3. Starting a Retroactive Plan for the 2025 Plan Year
One of the most valuable planning tools of SECURE 2.0 enables an employer to establish a plan after the end of the 2025 plan year and still capture deductions on its 2025 tax return.
Key Deadlines
Most retirement plans can be established up to the employer’s tax-filing deadline, including extensions, for the 2025 tax year.
However:
- Safe Harbor 401(k) plans must generally be established by October 1, 2025 if employee deferrals will apply for 2025.
- Other plan types (profit-sharing, cash balance, etc.) may be adopted retroactively with greater flexibility.
This gives business owners more time to evaluate options while still securing tax benefits for 2025.
Automatic Enrollment Requirements for New Plans
If you establish a new 401(k) or 403(b) plan with an effective date after December 29, 2022, SECURE 2.0 requires:
- Automatic enrollment with a default deferral rate of between 3%–10%
- Automatic escalation increasing 1% annually up to 10%–15%
Exemptions exist for:
- Employers with 10 or fewer employees
- Businesses less than 3 years old
- Church and governmental plans
If your business does not qualify for an exemption, your new 2025 plan must include these features.
Why Retroactive Plans Matter
A retroactive plan allows business owners to:
- Capture 2025 deductions for employer contributions
- Take advantage of SECURE 2.0 startup and contribution tax credits
- Begin 2026 already compliant with new Roth catch-up requirements
- Strengthen employee benefits in a competitive labor market
It’s a strategic planning move—especially as year-endapproaches.
How RMC Group Can Help
RMC Group is your retirement plan superhero ally, helping businesses navigate the evolving retirement plan landscape with clarity and confidence. Whether you’re launching your first plan or upgrading an existing one, our experienced team is equipped with the powers and tools to support:
- Strategic plan design consulting and SECURE 2.0 compliance
- Identifying and maximizing eligible tax credits
- Establishing retroactive plans for tax-year 2025
- Implementing automatic enrollment and Roth catch-up features
- Ongoing TPA and administrative support
- Clear and timely communication to employees
Our mission is to help you harness every retirement plan “superpower” available—so your plan stays cost-effective, compliant, and perfectly aligned with your business goals. Contact our office today at 239-298-8210 or schedule a meeting here with our Retirement Professionals.
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