Does the SECURE 2.0 Act Roth mandate affect me?
The Roth mandate affects you only if all three of the following apply to you:
- You are age 50 or older by Dec. 31, 2026; and,
- You have more than $150,000 in Social Security FICA tax wages for 2025; and,
- You want to contribute more than $24,500 to the 403(b) SRA* and/or 457(b) for 2026.
The Roth mandate does not affect you if any of these three conditions do not apply to you.
I exceed the income threshold, and I am age 50 or older. However, I do not want to contribute more than $24,500 to the 403(b) SRA and/or 457(b) for 2026. Does the SECURE 2.0 Act Roth mandate affect me, and do I need to act?
No. If you do not want to contribute more than the IRS general limit of $24,500 to the 403(b) SRA* and/or 457(b), the Roth mandate does not affect you.
Does the SECURE 2.0 Act Roth mandate apply to new hires?
No.
Does the SECURE 2.0 Act Roth mandate apply to rehired retirees and rehired former employees?
It may. If you retired or terminated employment from the university in 2025 with more than $150,000 in Social Security FICA tax wages for 2025, the Roth mandate does apply to you if you are rehired in 2026. This includes being rehired as an emeritus faculty with effort and funding.
Is the $150,000 income threshold based on my income or my total household income?
It is based on your U-M Social Security FICA tax wages (reported in Box 3 of your W-2). It does not include other sources of income, such as income reported on a 1099, or income earned by other members of your household.
I work part time at U-M with less than $150,000 Social Security FICA tax wages. Is my compensation for the year prorated to determine if I exceed the $150,000 threshold?
No. If you work part time for U-M, it is based on your actual income and not a full-time equivalent calculation.
If my U-M Social Security FICA tax wages are below $150,000 during the year but increase to the point of exceeding the limit, do I become subject to the Roth mandate for the year?
No. The income threshold always applies to the following year. If you are not subject to the Roth mandate and your compensation increases during the year to exceed the $150,000 threshold, it does not change your status for the year. However, you will be subject to the Roth mandate for the following year.
Does the Roth mandate affect how much I may contribute to a Roth IRA?
No. It only affects an employer-sponsored 403(b) and 457(b) plan.
Is there a maximum age or salary at which I can no longer make contributions to the U-M Roth 403(b) and/or Roth 457(b)?
No.
How does the Roth mandate affect the U-M retirement plans?
- If you are enrolled, it does not affect your 5% contribution or the 10% university contribution.
- You may contribute up to the IRS general limit of $24,500 to the 403(b) SRA* for 2026 as either pre-tax or Roth.
- If you want to defer more, you need to add the SECURE 2.0 Act Roth 403(b) SRA contribution.
457(b) Deferred Compensation Plan
- You may contribute up to the IRS general limit of $24,500 to the 457(b) for 2026 as either pre-tax or Roth.
- If you want to defer more, you need to add the SECURE 2.0 Act Roth 457(b) contribution.
How do I know if the Roth mandate applies to me?
- The Benefits Office will send you an email every December if you are subject to the Roth mandate for the following year.
I cannot have a Roth IRA because I exceed federal income limits. How can I have a Roth 403(b) and/or Roth 457(b) at U-M?
The federal income limit does not apply to employer-sponsored Roth 403(b) and Roth 457(b) plans. You may still contribute to the U-M Roth plans even if you cannot have a Roth IRA because you exceed the federal income limit. It is also possible to have a Roth IRA if you do not exceed federal income limits and also contribute to the U-M Roth 403(b) and Roth 457(b) plans.
Can I cash out money according to tax classification? For example, can I cash out only Roth contributions and earnings, or does a withdrawal have to be proportionally taken across both pre-tax and Roth sources?
You can specify to take pre-tax or Roth when taking a distribution.
If I decide to take action, what do I do?
If you decide to take action, you must make new elections through Wolverine Access. Follow the step-by-step guidance in the 2026 SECURE Act "how-to" presentation. To hear the audio, hover your cursor over the gray speaker graphic at the lower righthand side of the screen, then click on the black arrow just below and to the left of the speaker graphic.
*This also includes the 5% 403(b) contribution you make to the Basic Retirement Plan.