Tag: roth

Two retired people taking a walk in the woods with their dog. The view is behind them.

Your Top Questions About MSU’s Optional Retirement Plans

Published on by MSU Human ResourcesLeave a comment

Whether this is your first job out of school or you’ve been working for 40+ years, it’s important to make sure you’re taking advantage of every opportunity to prepare for your eventual retirement. Most benefit-eligible employees* are aware of and enrolled in the 403(b) Base Retirement Program (BRP) offered by MSU, which consists of a 5% employee contribution of your eligible compensation and a generous university matching contribution of 10% – an immediate two-for-one match of your investment – for a total contribution of 15%. While this provides an excellent foundation for your retirement savings, most employees will eventually want to consider additional savings options for their retirement.

In addition to the BRP, eligible employees also have the option of enrolling in two additional retirement programs: the 403(b) Supplemental Retirement Program and the 457(b) Deferred Compensation Plan. Enrollment in one or both optional programs can help employees meet their retirement savings goals, making it easier for them to transition to retirement.

New in 2026: SECURE 2.0 Act and After-Tax Roth Option

Earlier this year, MSU’s retirement plans were enhanced in alignment with the federal SECURE 2.0 Act to include a new requirement and an option for Catch-up contributions as well as a new After-tax Roth Contribution option for all eligible employees. Learn more on the HR webpage, After-Tax Roth and SECURE 2.0 Act.

Answers to Top Questions about Optional Retirement Plans

We’ve compiled a list of the top questions we receive as employees think about enrolling in these optional plans:

  • Q: Is there a minimum contribution amount required for one of the optional plans? What about a maximum amount?

    A: Employees may elect any percentage contribution, as all contributions are based on a percentage of eligible pay. For example, 1.50% would be an acceptable contribution election. Employees wishing to contribute a certain amount, such as $100 per paycheck, can use the calculator to convert a dollar amount to a percentage.

    Maximum contribution amounts are set by the Internal Revenue Service (IRS) each year. Information on current IRS limits, including Age 50 Catch-up contributions, can be reviewed at Maximizing Your Retirement Plan Contributions.

  • Q: Does contributing a small amount, such as $25 a month, make a difference in the long run?

    A: We encourage employees to work with their financial advisors or retirement vendors for assistance in deciding how much more to contribute. You may be surprised how a small contribution over a long time can impact your retirement account balance, and you may want to take advantage of compounding earnings as you save for retirement.

  • Q: What are the main differences between the 403(b) Supplemental and the 457(b) Deferred Compensation Plan?

    A: Generally, the differences are when an individual can access the funds and the loan provisions. Also, the 403(b) Supplemental contributions must be added to the Voluntary 403(b) Base contributions when calculating the IRS maximum contributions, whereas the 457(b) Deferred Compensation Plan has a separate IRS maximum limit. A more detailed comparison of the two different optional accounts can be found in the Retirement Plans Comparison chart.

  • Q: Can I enroll in an optional retirement plan account at any time?

    A: Yes, retirement plan elections can be made at any time. This includes beginning or canceling enrollment, increasing or decreasing contribution percentages, and changing vendors. Depending on payroll schedules and deadlines, there may be a delay when contributions start or stop. For more detailed information, please visit the HR website at Enroll or Make Changes to Retirement Plans.

For more information about available retirement plans from MSU, please review the retirement resources on the HR website and the MSU Retirement Plans Enrollment Guide. Find instructions to enroll in these optional retirement plans at any time throughout the year. Please contact the HR Solutions Center with any questions at SolutionsCenter@hr.msu.edu or 517-353-4434.

*Note: Certain types of employees are excluded from participating in the 403(b) Retirement Plan. Please see the 403(b) Base Retirement Program Eligibility Chart for more details. 

a person putting money in a pink piggy bank.

Roth Catch Up Requirement and New Retirement Savings Options 

Published on by MSU Human Resources4 Comments

This article was updated on November 26 with the 2026 IRS Contribution Limits.

To help us learn more about SECURE 2.0 Act and its new Roth options and requirement for certain Catch-up contributions, we talked to Dan, our Retirement Plan expert. Read our Q and A and review available resources to help you determine whether the Roth Catch-up requirement applies to you, if a new Roth savings option might benefit you, and about an increased savings option for those turning 60-63 in 2026.  

What is the SECURE 2.0 Act?  

Dan: In December 2022, the Setting Every Community Up for Retirement Act of 2022 (SECURE 2.0 Act) was signed into law. The retirement legislation includes significant changes that could help strengthen the retirement system and improve Americans’ financial readiness for retirement. Among a few changes, a big one is the Roth Catch-up requirement for certain people.  

What is the Roth requirement for Catch-up contributions?  

Dan: Starting in 2026, employees turning age 50 or older who earned more than $150,000* in the previous year (2025) must make any age 50 Catch-up contributions as after-tax Roth savings.  

* FICA wages found on your Form W-2 Box 3 wages 

What are the retirement contribution requirements and options based on my age and income, according to SECURE 2.0 Act?  

Dan:  Here is a helpful chart to illustrate the new requirements and available options under SECURE 2.0 Act based on your income, age, and whether you make Catch-up contributions:  

If you:Required ActionAvailable OptionsNotes
Earn more than $150,000* AND will be age 64 or older* in 2026 Any Catch-up contributions (up to $8,000*) MUST be after-tax Roth contributions Make your regular contributions as either pre-tax or after-tax Roth Catch-up contributions CANNOT be pre-tax 
Earn more than $150,000* AND will be ages 60-63* in 2026 Any Catch-up contributions (up to $11,250*) MUST be after-tax Roth contributions Make your regular contributions as either pre-tax or after-tax Roth Catch-up contributions CANNOT be pre-tax 
Earn more than $150,000* AND will be ages 50-59* in 2026 Any Catch-up contributions (up to $8,000*) MUST be after-tax Roth contributions Make your regular contributions as either pre-tax or after-tax Roth Catch-up contributions CANNOT be pre-tax 
Earn more than $150,000* AND will be under age 50* in 2026 No required action Make your regular contributions as either pre-tax or after-tax Roth  
Earn LESS than $150,000* AND will be age 64 or older* in 2026 No required action Make your regular contributions and your Catch-up contributions (up to $8,000*) as either pre-tax or after-tax Roth  
Earn LESS than $150,000* AND will be ages 60-63* in 2026 No required action Make your regular contributions and your Catch-up contributions (up to $11,250*) as either pre-tax or after-tax Roth  
Earn LESS than $150,000* AND will be ages 50-59* in 2026 No required action Make your regular contributions and your Catch-up contributions (up to $8,000*) as either pre-tax or after-tax Roth  
Earn LESS than $150,000* AND will be under age 50* in 2026 No required action Make your regular contributions as either pre-tax or after-tax Roth  

 Notes: 

*Based on the IRS 2026 limits. Ages are based on the age you will be on December 31, 2026. 

**Based on 2025 FICA “Social Security wages” from box 3 of the 2025 MSU W-2 Form. 

***The current pre-tax contribution and the new after-tax Roth option will be subject to the 2026 IRS limits for both their regular employee contributions (currently $24,500) and the Age 50 Catch-up (currently $8,000). 
 

What are the benefits of contributing to a Roth? 

Dan: Unlike traditional pre-tax contributions to a 403(b) or 457(b) account, after-tax Roth contributions allow you to withdraw that money tax free once you retire. So, while you’re still paying taxes on your earnings now, you may enjoy a reduced tax obligation in the future.  

Are there downsides to a Roth contribution?  

Dan: A couple of considerations include the tax implications and timing requirements. First, Roth contributions are withheld after your taxes are deducted, meaning you will pay more in tax with each paycheck and receive less take home pay. Second, you must wait at least five years after your first after-tax Roth contribution and you must be at least 59 ½ years old to make a tax-free withdrawal.  

I am not required to make after-tax contributions, but I’m interested in the opportunity. What do I do?  

Dan: Beginning in January, you can log into the EBS Portal and make changes to your 403(b) Supplemental and/or 457(b) Deferred Compensation accounts to move your current pre-tax contributions to the new after-tax Roth option. The 403(b) Base account will remain available only for pre-tax contributions.  

I’m turning 60-63 in 2026, and I heard about a new retirement savings option for Catch-up contributions. What’s that?  

Dan: If you make Catch-up contributions and you’re turning 60-63 anytime in the calendar year, MSU now offers a new option that allows your Catch-up amount to be higher than the regular Age 50 Catch-up amount. Once you reach the standard contribution limit in your MSU 403(b) Supplemental and/or 457(b) Deferred Compensation accounts, you can save up to $11,250 instead of the regular $8,000 limit for Age 50 Catch-up.

Where do I find more information about SECURE 2.0 Act, Roth and MSU’s Retirement Plans?  

Information about the MSU retirement plans is available on the HR webpage, Available Retirement Plans. You can also learn more on the After-Tax Roth and SECURE 2.0 Act HR webpage. 

Resources: SECURE 2.0 Act and Roth options 

Fidelity: 

TIAA: