By Nicholas Hamner
Investment Advisor Representative
[email protected]
We’re going to talk about two things this week. Ready?
First, something financial. If you are still working and made more than $150,000 this year, you are considered by the U.S. government to be a “high-wage earner”. Congratulations on the new title! It doesn’t mean much now but it will mean something next year.
In 2026, if you are still working, if you are above the age of 50, if you made more than $150,000 in 2025, and if you are making extra catch-up contributions to your employer-sponsored retirement accounts—specifically 401(k)s, 403(b)s, and 457(b)s—you are going to be required to make those catch-up contributions into a Roth account. That’s one of the quirky provisions of SECURE 2.0 that was finally ironed out and put in place last week after originally being passed back in 2022.
How will this work?
The employer-sponsored retirement account contribution limit for 2026 will be $24,500, meaning anyone with an employer-sponsored retirement plan available to them can contribute up to $24,500 to their plan in 2026. Anyone 50 or older who is still working will have the option to contribute another $8,000 on top of the $24,500 as a catch-up. It’s kind of like a late inning rally for folks to boost their retirement savings. For every eligible employee, the first $24,500 in contributions can be made to their traditional employer-sponsored retirement account or to a Roth if it’s available. And for anyone making less than $150,000 this year, the additional $8,000 in catch-up contributions can be made to their traditional account or the Roth as well. But if the employee made over $150,000 in 2025, that additional $8,000 can only go to the Roth piece of their employer-sponsored retirement plan.
What if they’re between the ages of 60 and 63 and eligible for the “super” catch-up contribution limit of $11,250? If they made more than $150,000 this year, every cent of that additional $11,250 has to go into the Roth component.
What if their employer doesn’t offer a Roth component to their employer-sponsored retirement plan? If the employee made more than $150,000 this year, they don’t have the ability to catch up.
What if they have a SIMPLE IRA? Check with HR because they really messed with that. Moreso than we can cover here.
If this will affect you, don’t worry too much. It’s not the end of the world and there are plenty of other ways to invest that money. You will miss out on the tax-deferral benefits of that $8,000 (or $11,250). If you have questions, let’s talk.
To the second topic. Fun and games! Last week we held our first Ambassador bingo night at the Manor House at Commonwealth Country Club. We hosted past Ambassadors, current Ambassadors, and soon-to-be Ambassadors and everyone had a great time. Good food, great games, and celebrity caller Michael Barkann had a story for every break and a name for every number he called. It was a great way to recognize our Ambassadors!
I just used “ambassador” a lot in that previous paragraph. What’s an Ambassador?
A Franklin Retirement Solutions Ambassador is a client who has told someone else about the work we do here. A client that has introduced us to a friend, a family member, a neighbor, a co-worker… someone they thought would benefit from meeting us… and then had that introduction go on to become a client with us as well. We call those people Ambassadors, and we are in the process of building out our Ambassador Program to ensure that people who go out of their way to endorse us know how much we appreciate them.
Interested in becoming an Ambassador yourself? Reach out to your advisor, or to me, for more information. We are not limiting memberships and we’re happy to see the ranks swell!
One final note—a little one. You probably know Michael Barkann from his work across Philadelphia sports radio and TV, or have at least heard his name. He was our celebrity bingo caller at the Ambassador event and he could not have been a nicer, more outgoing guy. He and his wife have a charity called the Barkann Family Healing Hearts Foundation that they’ve run since 2013. They do a big holiday push and if you’re feeling charitably inclined, their heart is in the right place.