What is changing with 401(k) catch-up contributions in 2026?

Starting January 1, 2026, employees age 50+ whose prior-year W-2 wages from their current plan sponsor exceed an indexed $145,000 threshold must make catch-up contributions on a Roth (after-tax) basis rather than pre-tax.

Who is affected by the Roth-only catch-up rule?

Age 50+ employees whose prior-year W-2 wages from the same employer sponsoring the plan exceed the indexed $145,000 threshold. The test is employer-specific and does not aggregate wages across different employers.

What happens if my plan doesn’t offer a Roth option?

Plans without a designated Roth feature may be unable to accept catch-up contributions for affected high earners until a Roth option is added. Check with HR or the plan administrator to confirm timing.

Does the age 60–63 “super catch-up” still apply?

Yes. The enhanced catch-up for ages 60–63 remains, and for high earners over the wage threshold it must be contributed as Roth beginning in 2026.

How is the $145,000 wage threshold determined?

It’s based on your prior-year W-2 wages from the employer that sponsors your plan, indexed for inflation. A job change can alter your status because the test does not combine wages from multiple employers.

What planning steps should I consider before 2026?

Confirm your wage status with payroll, ensure your plan offers a Roth option, model tax tradeoffs between pre-tax 2025 catch-ups and Roth 2026+ catch-ups, adjust withholdings for the lost deduction, and coordinate with broader strategies like Roth conversions and cash-flow planning.

Will my taxes go up in 2026 because catch-ups are Roth?

Possibly. High earners losing the pre-tax deduction may see higher current-year taxes, though the tradeoff is potential tax-free growth and withdrawals in retirement. The net effect depends on your bracket today vs. in retirement and your state tax situation.

Should I switch my entire contribution to Roth?

Not necessarily. The rule applies to catch-up dollars. Whether to make base deferrals Roth or pre-tax depends on your current and expected future tax rates, time horizon, and goals. A personalized plan can help determine the right mix.

The 2026 Roth Catch-Up Rule Is Final: What High Earners (and Everyone Else) Should Do Now

HFF Staff Writer
3 hours ago
4 min read

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If you’re 50+ and make retirement “catch-up” contributions at work, a big change just became real. The IRS finalized regulations that, starting in 2026, will require many higher-income employees to make those catch-ups on a Roth (after-tax) basis rather than pre-tax (IRS, “Treasury/IRS Final Regulations,” Sept. 15, 2025; Federal Register, Sept. 16, 2025). In plain English: no upfront tax deduction on those extra dollars if you’re over the income threshold—though the tradeoff is tax-free growth and withdrawals later (MarketWatch, 2025).

Let’s unpack what changed, who’s affected, and smart moves to consider before the calendar flips.

What changed, exactly?

Mandatory Roth catch-ups for high earners (2026): If your prior-year W-2 wages from your current employer exceed $145,000 (indexed), any age-50+ catch-up contributions to 401(k)/403(b)/governmental 457(b) must be Roth starting in 2026 (IRS; Federal Register; The Tax Adviser, 2025).
The threshold is employer-specific: It’s based on wages from the employer sponsoring the plan (not total household income). That nuance matters if you changed jobs or have multiple employers (Nixon Peabody, 2025).
“Super catch-up” remains (ages 60–63): SECURE 2.0’s enhanced catch-up (150% of the standard catch-up) still exists—also Roth-only if you’re over the wage threshold (MarketWatch, 2025; The Tax Adviser, 2025).
Transition relief through 2025 stands: The IRS earlier granted a runway so plans could adapt; the Roth-only rule bites starting January 1, 2026 (IRS Notice 2023-62; IRS update July 3, 2025).
If your plan lacks a Roth feature: You may not be able to make catch-ups at all in 2026 until your employer adds Roth (Investopedia, 2025).

Who is affected?

Age 50+ employees whose prior-year W-2 wages from the same employer exceed $145,000 (indexed) are in the Roth-only bucket (IRS; The Tax Adviser, 2025).
Self-employed folks without W-2 wages from an employer sponsoring the plan aren’t caught by this wage test in the same way (IRA Help, 2025).
If you’re below the threshold, you can still choose pre-tax or Roth catch-ups (Investopedia, 2025).

Why the change?

Congress designed the Roth-only rule (SECURE 2.0 §603) partly as a revenue raiser—taxes are paid now instead of deferred (NAPA, 2025). Regulators have now locked in the operational details (IRS; Federal Register).

The good, the bad, and the planning

The good:

Roth catch-ups can be powerful if you expect higher future tax rates, value tax-free RMD-free growth in a Roth 401(k)/Roth IRA (via rollovers), or want tax-efficient legacies for heirs (MarketWatch, 2025).

The bad:

Losing the upfront deduction can sting—especially if you’re in a high marginal bracket today (WSJ, 2025).
Plans without a Roth option may block catch-ups until they add one (Investopedia, 2025).

The planning angle: This isn’t just about losing a deduction—it’s a lifetime tax-location decision. Paying tax now to reduce future tax risk can make sense for many, but not all. Your income variability, retirement timeline, state taxes, and charitable goals all matter.

Practical moves to consider before 2026

Confirm your wage status early. Ask HR or payroll where you’ll land relative to the $145,000 (indexed) threshold based on current-employer W-2 wages. If you’ll be above it, assume Roth-only catch-ups in 2026 (IRS; Nixon Peabody, 2025).
Make sure your plan offers a Roth option. If it doesn’t, nudge your employer/administrator now. Otherwise, you could lose catch-up ability next year (Investopedia, 2025).
Model the tax tradeoff. Run side-by-side scenarios:
- Pre-tax 2025 catch-ups (last year for the deduction for many high earners)
- Roth-only 2026+ catch-upsInclude your state taxes, expected retirement bracket, and whether Roth conversions are in your plan (The Tax Adviser, 2025; MarketWatch, 2025).
Coordinate with IRAs and conversions. Roth 401(k) catch-ups in 2026+ can dovetail with Roth conversion strategy (e.g., fill lower brackets in gap years, manage Medicare IRMAA). Sequence matters.
Revisit cash flow and withholding. No deduction in 2026 means higher current-year tax. Adjust withholdings/estimates now to avoid surprises (IRS general guidance).
If you’re 60–63 in 2026+: Explore the “super catch-up” (150% of the standard catch-up). It’s Roth-only if you’re over the wage threshold—but can meaningfully boost tax-free savings in a short window (MarketWatch, 2025; The Tax Adviser, 2025).
Mind the employer-specific rule if you switch jobs. The wage test applies to the employer sponsoring the plan (not combined across employers), which can produce different results after a job change (Nixon Peabody, 2025).

Quick example

A 55-year-old earns $190,000 W-2 wages in 2025 and maxes their plan in 2026.

Before 2026: They could do pre-tax catch-ups and lower their taxable income.
In 2026: Their catch-ups must be Roth, so current taxes rise—but future withdrawals can be tax-free. Whether that’s better depends on expected retirement tax rates, state taxes, and legacy goals.

Bottom line

This rule change is more than an administrative tweak. It’s a shift in when you pay tax on some of your most valuable retirement dollars. For many high-earning 50-somethings, 2025 is the last year to grab pre-tax catch-up deductions; after that, plan for Roth-only catch-ups and adjust cash flow, withholding, and your broader tax plan accordingly (IRS; Federal Register; The Tax Adviser, 2025).

If you want help deciding whether Roth-only catch-ups strengthen your plan—or how to pair them with conversions, charitable strategies, or legacy planning—let’s map it out together.