The rules for 401(k) catch-up contributions changed in 2026, and higher-income workers need to adjust their retirement planning accordingly.
As of January 1, 2026, certain high earners age 50 and older are required to make catch-up contributions as Roth (after-tax) contributions. If their employer’s plan does not offer a Roth 401(k) option, those individuals may not be able to make catch-up contributions at all.
This change stems from the SECURE 2.0 Act and has important tax and planning implications.
What Changed in 2026?
Under the new law, catch-up contributions for higher-income workers must be Roth contributions.
That means:
- Taxes are paid when the contribution is made
- Qualified withdrawals in retirement are tax-free
Previously, catch-up contributions could be made as either pre-tax or Roth.
Who Is Subject to the Mandatory Roth Rule?
The Roth catch-up requirement applies if all of the following are true:
- You are age 50 or older
- Your prior-year FICA wages exceeded $150,000 (indexed for inflation)
- You are making 401(k) catch-up contributions
Workers below the income threshold may still choose between pre-tax and Roth catch-up contributions, if their plan allows.
Employer Plan Requirement
A key detail of the new rule is that employer retirement plans must offer a Roth option.
If a 401(k) plan does not include a Roth feature, high-income employees are not permitted to make catch-up contributions.
Employees should confirm their plan’s features, and employers should ensure compliance to avoid unintended restrictions.
401(k) Contribution Limits for 2026
The following reflects current 2026 401(k) contribution limits:
- Standard contribution limit: $24,500
- Catch-up contribution (age 50+): $8,000
- Total: $32,500
- Enhanced catch-up (ages 60–63): $11,250
For high earners, all catch-up contributions must be Roth.
Why Roth Catch-Up Contributions Matter
While Roth contributions require paying taxes upfront, they offer several long-term benefits:
- Tax-free investment growth
- Tax-free qualified withdrawals
- Greater flexibility in retirement income planning
- Potential protection against higher future tax rates
For many high-income households, mandatory Roth catch-ups may improve overall tax diversification.
Bottom Line
The Roth 401(k) catch-up contribution rule is now in effect for 2026 and affects many high-income workers nearing retirement:
- Catch-up contributions must be Roth if income exceeds the threshold
- Employer plans must offer a Roth 401(k) option
- Retirement and tax strategies may need adjustment
Reviewing your contribution strategy now can help ensure you remain compliant while maximizing long-term retirement benefits.
