If the stock market or the value of your portfolio soars, tax rates may not bother you at all in the end, Conners said. If the company doesn’t offer a Roth 401(k), those high earners can’t make any catch-up contributions. You may also want to reevaluate your investments inside your 401(k).
adjective
- In The Cambridge Dictionary and The Oxford Dictionary, “catch up” is defined clearly by both as a phrasal verb.
- For those between ages 60 and 63 at the end of the year, there is a ‘super catch-up’ limit that caps out at $11,250.
- However, once the rules are fully implemented (or sooner in some cases), high earners will need to make Roth-only catch-up contributions.
- But the IRS has finalized regulations giving employers and taxpayers some flexibility to adjust.
Even though there are a lot of rules concerning how to use catch up and catch-up, we hope that all your doubts about the grammar rules have now disappeared. The hyphenated version catch-up is either a compound adjective or a compound noun. The first is with the hyphen, in which case catch-up is an adjective modifying a noun, or it is a noun. “When you pull those funds out tax-free, you’ll love it. It’ll be delayed gratification instead of instant gratification.”
It’s the first mandatory Roth provision ever added to the tax code. While it is appropriate to write it as two words or as a hyphen form, the one-word variation does not work in any case. We need to make sure there is a key difference between “catch” and “up” when writing them. According to Google Ngram Viewer, “catch up” is the most popular choice of the three. This shows that you are more likely to come across the agency problem phrasal verb in English than any other variation.
The term catch up as two words without a hyphen is a phrasal verb that has two principal meanings. In 2026, Americans aged 50 and older earning at least $145,000 in the prior year must make their catch-up contributions to a Roth 401(k), the IRS said. The rule was part of Secure Act 2.0 to go into effect from 2024 but was delayed, giving companies time to comply.
For those between ages 60 and 63 at the end of the year, there is a ‘super catch-up’ limit that caps out at $11,250. These higher limits allow you to contribute a max of between $31,000 and $34,750 to your 401(k) each year, depending on your age. Furthermore, the rules of AP Style and the Chicago Manual of Style state that you should use a hyphen with the term catch-up when it is an adjective or noun. In The Cambridge Dictionary and The Oxford Dictionary, “catch up” is defined clearly by both as a phrasal verb. They both mention that it comes from the root “to catch” and that the two-word variation is appropriate in this way.
Importance of Adhering to Grammar Rules
So, your individual income must exceed $145,000 at one employer before you must make catch-up contributions to the Roth plan. If you earn more than $145,000, but at multiple employers, the pre-tax catch-up contributions will still be available. And since the limits are based on your prior-year income for the employer, new employees might avoid the Roth requirement on catch-up contributions in the first year. Contributions made to a traditional 401(k) reduce the amount of income reported on your current tax return. If your salary is $200,000 and you contribute $20,000 to a traditional 401(k), your taxable salary would be $180,000. If your top federal tax rate is 24% and your state’s tax rate is 4%, every dollar contributed to your 401(k) would save you $.28.
Is “Catch-up” Hyphenated?
Currently, you have the flexibility to decide if you want contributions to go to a traditional or Roth 401(k). If your employer offers a Roth 401(k), you can split your contributions in any proportion between the two types of plans. If you’re an employee age 50 and older, you can continue making catch-up contributions to your retirement accounts for now. However, once the rules are fully implemented (or sooner in some cases), high earners will need to make Roth-only catch-up contributions. However, some might note that the catch-up rule technically applies as of January 1, 2026. But the 2027 date essentially gives employers and plans a grace period (of sorts) as they work in good faith to ensure their plans fully comply with the new rules.
Investments inside Roth accounts grow tax-free, so it is often beneficial to put more growth-oriented investments like stocks inside a Roth. A slightly different meaning of the noun catch-up is when you say you are playing catch-up. For example, you say this when you are behind in some competition or game involving a score. However, the noun stands alone and does not describe another noun. “In retirement, you have go-go, slow-go, and no-go years,” said John Jones, investment advisor representative at Heritage Financial.
Browse Nearby Words
The change-up may force older savers to take a fresh look at their tax situation, now and in the future, experts said. “Catch-up” is correct as a hyphenated form when we use it as a noun or adjective. In this way, we can group the two words to show that they are modifying another noun at some point in the sentence. Both dictionaries also mention the hyphenated form of “catch-up.” They write that it is correct as a noun or adjective when it is modifying another noun in the sentence. When used as an adjective or noun, the correct form is “catch-up,” with a hyphen.
- Under SECURE 2.0, if you’re at least age 50 and earned $145,000 or more in the previous year, you can make catch-up contributions to your employer-sponsored 401(k) account.
- Conversely, contributions to a Roth 401(k) don’t reduce your taxable income annually.
- In this way, it is known as a phrasal verb, which shows that someone is trying to “catch up” with another person or thing.
Catch Up On New 401(k) Rules
Through examples, we’ll delve into correct and incorrect usage, emphasizing spelling and punctuation. Your contributions are invested, and when you ultimately take money out of your 401(k), you pay tax on every dollar distributed. In other words, you get a deduction now, your money grows tax-deferred, and you pay taxes later when you take money out.
Is “Catch up” Two Words?
The SECURE Act was passed in 2019, and was followed by a second bill, generally referred to as SECURE 2.0, in 2022. A provision of SECURE 2.0 stated that high-income earners would no longer be allowed to make catch-up contributions to their 401(k) on a tax-deferred basis. It has been nearly three years since the bill passed, but just this month, the IRS finally provided clarity on when and how these new rules would be implemented. Read on to see if you will face changes to 401(k) contributions and how to navigate them. Initially, that change was slated to start with contributions made in 2024. But the IRS has finalized regulations giving employers and taxpayers some flexibility to adjust.
Employers can voluntarily implement the changes early, and some government or collective bargaining plans may have later start dates for the new rules. The word catchup as one word without a hyphen is incorrect, and you should not use it. You do not need to capitalize either part of the hyphenated form due to this. Adhering to these guidelines ensures linguistic accuracy and effective expression, fostering seamless communication across various contexts. Consistency in usage between UK and US English will be discussed, and a summary will clarify when each form is appropriately employed.