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In Practice October 1, 2025
Making Roth Real
How plan advisers are helping participants understand Roth contributions to retirement plans.
Reported by Rhea Wessel
The SECURE 2.0 Act of 2022 has brought Roth status into sharper focus—mandating it for the catch-up contributions of high earners, allowing for employer matches and signaling a shift in how retirement income planning is structured.
But while the legislative intent is clear, participant understanding may not be.
Across income levels, plan participants remain confused about what Roth means, when to use it and how it compares to traditional pre-tax savings, advisers say. That confusion is a big barrier to broader adoption—and communication strategies must adapt.
“It’s not just about saying Roth is good,” says Andrew Way, vice president of sales and marketing at Corporate Insight in New York. “Too often, messaging is overly generic. What resonates with a 25-year-old isn’t going to land with someone close to retirement.”
Way, who analyzes digital and participant-facing tools across the retirement industry, says most plan sponsors still offer explanations that don’t connect.
“What works is showing people what Roth means for them—using personalized estimates, interactive calculators and plain language,” he says.
‘People Don’t Understand It’
Roth individual retirement accounts were proposed by former Senator William Roth, R-Delaware, and were eventually enacted in the Taxpayer Relief Act of 1997. They permit contributions made on a post-tax basis (those not claimed as an income tax deduction) to be tax-free upon withdrawal, if the account owner is at least 59.5, and do not require tax to be paid on capital gains, dividends or interest accumulated in the account. Roth 401(k) accounts, which include matching contributions, and Roth-type contributions to 403(b) plans were authorized as part of the Economic Growth and Tax Relief Reconciliation Act of 2001 and took effect in 2006.
The urgency to properly communicate these options to participants is increasing. Although the 2025 PLANSPONSOR Plan Benchmarking Report showed that 78% of retirement plans across all plan sizes give participants access to Roth deferrals, Plan Sponsor Council of America data from 2023 showed that only 21% of participants use them when available.
Although SECURE 2.0 enabled Roth employer matches, adoption is nearly nonexistent, due largely to system and communication gaps. A report by Mercer based on data collected in February and March, “SECURE 2.0: Implementation Trends of Optional Provisions,” found that fewer than 1% of plans have implemented the Roth match option, though nearly half (45%) of plan sponsors say they are considering it. Mercer suggested that implementation is behind due to the recent IRS guidance, the need for coordination between various vendors and internal stakeholders, and considerations such as participant education and communication.
“This disparity between what recordkeepers are experiencing in terms of implementation and what plan sponsors are indicating highlights just how complex this provision is and the reality that more time is required for recordkeepers to update their technology and systems to meet sponsor demand,” Mercer wrote. “We anticipate there will be an increase in recordkeepers’ reported adoption of this provision in the coming years, as build-out and vendor/stakeholder coordination occur.”
Advisers have the opportunity to step in to help participants take advantage of the Roth options.
“It’s the biggest gift the U.S. government has ever given taxpayers,” says Heath Harris, a founding financial adviser at Compound Advisory in the Washington, D.C. area. “But people don’t understand it unless you show it to them.”
Building Up the Roth ‘Muscle’
Harris uses behavioral language to make the concept resonate. Rather than talking about tax rates or legislative shifts, he starts by asking participants if they received a big tax refund last year.
“If you did, that’s a sign you could probably afford Roth,” he says.
Harris also leans on planning software that shows participants their expected retirement income under different tax scenarios.
“It’s about showing the Roth as real—as something that can reduce their taxes in retirement and give them more flexibility,” Harris says. “People aren’t going to shift unless they can picture the outcome.”
But even the best tools require a clear story. Chad Gammon, a fee-only financial planner in Cedar Rapids, Iowa, who works directly with plan participants, says many older workers do not just misunderstand Roth options—they do not understand the basic mechanics of the tax system.
“They don’t know what tax bracket they’re in now, let alone what they’ll be in later,” Gammon says. “Advisers need to educate, not sell. It’s about helping them see how Roth, traditional and brokerage accounts all fit together.”
For pre-retirees, he focuses on building up the Roth “muscle” many never developed. A lot of people in their 50s and 60s have very little Roth exposure, Gammon says. They need to understand why it’s not too late—and why using Roth options now could help them later, when required minimum distributions kick in.
Even among more engaged participants, Roth options can still be unclear.
James Sullivan, a financial planner who leads the retirement department at Essex Financial in Hartford, Connecticut, finds that high earners are often surprised—and excited—to learn they can make large Roth contributions within their workplace plan.
“They assume they’re locked out of Roth because they make too much to contribute to a Roth IRA,” he says. “Once they understand they can still do Roth 401(k), they want to know more.”
That enthusiasm, though, can be fragile. Sullivan says some clients express concern about the long-term viability of Roth’s favorable tax treatment, especially in a politically uncertain environment. “They ask whether the government could ever take away the tax-free benefit,” he says. “We have to explain that any change would almost certainly not be retroactive.”
Personalized Communication
Advisers also face new challenges communicating about SECURE 2.0’s mandatory Roth catch-ups for high earners, which begin in 2026 and mandate that employees age 50 and older who earned more than $145,000 in the prior year (indexed to inflation) must make all catch-up contributions on a Roth (after-tax) basis.
Richard Cohen, an employee benefits attorney at Shipman & Goodwin LLP, also in Hartford, Connecticut, says the SECURE 2.0 Roth catch-up rule will add opportunities for advisers to prepare clear explanations for high earners.
“If you’ve always done your catch-ups pre-tax, you may be surprised when they must be Roth starting in 2026,” he says.
Way says personalization is the key to better communication about Roth options.
“It’s not about explaining tax code changes,” he says. “It’s about asking: ‘What does this mean for you? What could this do for your retirement income?’”
The stakes are rising. Starting in 2026, high earners who make catch-up contributions will have no choice but to use Roth, pulling more participants into the system, whether they planned for it or not.
Even if Roth matching remains rare, the direction of travel is clear: Roth options are becoming unavoidable for larger swaths of the workforce. That makes communication not just a helpful add-on, but a core responsibility for advisers—showing participants why these changes matter and how to turn them to their advantage.
