Starting in 2026, higher earners age 50 and older must make 401(k) catch-up contributions as Roth contributions if prior-year FICA wages exceed $150,000. This rule impacts take-home pay, tax planning, and retirement strategy – making it critical to plan ahead.
What Changed in 2026 with 401(k) Catch-up Contributions?
Starting in 2026, the rules around 401(k) catch-up contributions change for higher earners. This update comes from the SECURE 2.0 Act, a major piece of legislation designed to strengthen the retirement system.
Under the new rule, if you are age 50 or older and earned more than $150,000 in FICA-taxable wages in the prior year (2025), any catch-up contributions you make must go into a Roth 401(k).[1]
That means those catch-up dollars are contributed after tax, rather than reducing your taxable income today.
401(k) Contribution Limits for
While you give up the upfront tax deduction you may have been used to, Roth 401(k) contributions come with a tradeoff: The potential for tax-free growth and tax-free withdrawals in retirement, assuming you meet the plan’s 5-year rule.
If you earned $150,000 or more in the 2025 tax year, the adjustment takes effect for contributions made during the 2026 tax year.
This means the rule applies to contributions you make now in 2026 – it does not backdate to last year.
2026
To plan effectively, we feel it’s crucial to know the latest contribution limits.
For 2026, the IRS has announced the following figures
| Contribution Type | 2026 Limit |
| Employee Deferral Limit | $24,500 |
| Age 50+ Catch-Up | $8,000 |
| Total (Age 50–59) | $32,500 |
| Ages 60–63 “Super Catch-Up” | $11,250 |
| Total (Age 60–63) | $35,750 |
Who the New Roth 401(k) Catch-Up Rule Apply To?
The new Roth 401(k) catch-up rule is specific. It only applies if you meet both of these conditions:
- You are age 50 or older.
- You had FICA-taxable wages of more than $150,000 in the previous calendar year.
For example, if your W-2 from 2025 shows FICA wages exceeding $150,000, this rule will apply to any catch-up contributions you make in 2026.
Who Is Not Affected by the 2026 401(k) Catch-Up Rule
Most 401(k) participants will not be affected by this change.
You are not subject to the mandatory Roth catch-up rule if:
- You are under age 50.
- If you are 50 or older and your prior-year FICA wages were less than $150,000.
What Happens If Your Plan Doesn’t Offer a Roth 401(k)?
If your 401(k) plan does not have a Roth option, and you are required to make Roth catch-up contributions, you will lose the ability to make any catch-up contributions at all.
Many employers are expected to add a Roth 401(k) option to their plans to avoid this problem.
Why the Roth 401(k) Catch-Up Rule Matters for Tax Planning
If this rule applies to you, it affects your tax planning, cash flow, and how you think about retirement savings going forward.
Losing the upfront tax deduction on catch-up contributions means your taxable income may be higher, which could increase your tax bill for the year.
However, you are effectively pre-paying the taxes on that money.
In exchange, you gain retirement savings that are withdrawn tax-free down the road.
What to Do Now If This Rule Applies to You
Don’t wait to think about this.
- Confirm your 2025 income to see if you have exceeded the $150,000 FICA wage threshold.
- Check to see if your 401(k) plan offers a Roth option. If not, ask your HR department or plan sponsor if they intend to add one.
- Consult with a financial and tax professional to see how this change may impact your personal tax situation and retirement goals.
