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Ask The Tax Editor, September 4: Changes To 401(k) Catch-up Contributions And More

Each week in our Ask the Tax Editor series, Joy Taylor, The Kiplinger Tax Letter editor, answers questions on topics submitted by readers. This week, she's looking at four tax questions from readers on retirement plans and IRAs, including a big change to 401(k) catch-up contributions. (Get a free issue of The Kiplinger Tax Letter or subscribe.)

1. 401(k) catch-up contributions

Question: I am 53, and I make tax-deferred contributions each month to my employer's 401(k) plan. This year, I intend to max out my regular contributions and also make catch-up contributions to the plan. However, I was told by my employer that, because of the amount of my annual salary, I can put catch-up contributions only into my employer's Roth 401(k). Is this true?

Joy Taylor: Yes. This change, which was enacted under the 2022 Secure 2.0 Act, first takes effect this year. Employees who are 50 and older, and whose annual compensation exceeds $150,000 in 2025, can make 401(k) catch-up contributions only to a post-tax Roth 401(k). Note that the IRS offered a grace period until 2027 for employers and plans to implement the rule in good faith, but many employers have already done so.

2. Roth IRA conversions

Question: I am 75 years old. I am thinking of converting a portion of my traditional IRA to a Roth IRA. Can I do that before taking my required minimum distribution (RMD) from my traditional IRA for the year?

Joy Taylor: No. You must first take your annual RMD for the year before doing the Roth conversion.

For people with multiple traditional IRAs, the rule that you must take your annual RMD before doing a Roth conversion for the year can be tricky. That’s because if a person has multiple traditional IRAs, the total aggregate RMD for the year must be withdrawn during the year before doing a Roth conversion from any of the traditional IRAs. (Note that this doesn’t include RMDs from 401(k)s or other workplace retirement plans.)

3. IRA inherited from spouse

Question: My wife passed away last year in late December. She had a traditional IRA, and I am the beneficiary. After she died, I elected to have her IRA funds added to my traditional IRA, but that didn't happen until February of this year. How do I calculate my RMD for 2026?

Joy Taylor: Since you rolled your deceased wife's IRA into your own IRA, you are treated as owning the IRA. So you determine your RMD as if you were the owner, beginning the year you are deemed to be the owner (that would be 2026, when you added the funds to your IRA). You would then determine your RMD for 2026 using your life expectancy. I am guessing your wife, while alive, already took her RMD for 2025, the year of her death. If not, you have until December 31, 2026, to do so.

4. Inherited Roth IRA

Question: I inherited a Roth IRA from my uncle earlier this year. Do I have to take annual RMDs?

Joy Taylor: No. Roth IRA owners do not need to take RMDs. You should, however, be aware of the 10-year rule for inherited IRAs. Similar to the rules for traditional IRAs, many non-spousal beneficiaries of Roth IRAs inherited after 2019 must clean out the account by the end of the 10th year after the owner’s death.

Because Roth IRA owners are not required to take annual RMDs, beneficiaries of inherited Roth IRAs needn’t worry about whether the original account owner died before or after the starting date for taking RMDs. Roth IRA beneficiaries can opt to clean out the account in year 1, wait until year 10 to take out all the Roth IRA funds, skip years, or take annual distributions, provided they fully deplete the Roth IRA within the 10-year period.

About Ask the Editor, Tax Edition

Subscribers of The Kiplinger Tax Letter, The Kiplinger Letter and The Kiplinger Retirement Report can ask Joy questions about tax topics. You'll find full details of how to submit questions in each publication. Subscribe to The Kiplinger Tax Letter, The Kiplinger Letter or The Kiplinger Retirement Report.

We have already received many questions from readers on topics related to tax changes in the One Big Beautiful Bill, retirement accounts and more. We will continue to answer these in future Ask the Editor roundups. So keep those questions coming!

Not all questions submitted will be published, and some may be condensed and/or combined with other similar questions and answers, as required editorially. The answers provided by our editors and experts, in this Q&A series, are for general informational purposes only. While we take reasonable precautions to ensure we provide accurate answers to your questions, this information does not, and is not intended to, constitute independent financial, legal, or tax advice. You should not act, or refrain from acting, based on any information provided in this feature. You should consult with a financial or tax advisor regarding any questions you may have in relation to the matters discussed in this article.