Planning to boost your retirement savings with catch-up contributions? Starting in 2026, high-wage earners will face new catch-up contribution requirements that may change how you save and pay in taxes later. These updates, part of the SECURE 2.0 Act, apply to both 401(k) and 403(b) plans and could impact your long-term strategy. Learn what’s changing, who it affects, and how you can prepare now.
What’s Changing Under SECURE 2.0?
Effective Jan. 1, 2026, participants who earn in excess of $145,000 in FICA wages (indexed annually) the previous year must make all catch-up contributions as Roth (after-tax). These individuals are generally referred to as high-wage earners.
This rule applies to 401(k) and 403(b) plans. If high-wage earners wish to make catch-up contributions, they must do so on an after-tax basis. In addition to elective catch-up contributions, some contributions can also result from corrective activity related to annual nondiscrimination testing when deferrals exceed certain regulatory limitations.
Key Roth Catch-up Changes You Need to Know for 2026
Mandatory Roth Catch-up Contributions
Participants aged 50 or older who qualify as high-wage earners must designate their catch-up contributions as Roth. These after-tax contributions aren’t tax-deductible.
Impact on Retirement Savings
Although Roth contributions are taxed upfront, they can grow tax-free. Qualified withdrawals during retirement won’t be subject to federal income taxes. This can benefit participants who expect to be in a higher tax bracket in retirement or want nontaxable retirement income available to them.
No Change to Contribution Limits
Annual contribution limits remain unchanged. For 2025, the catch-up contribution limit is $7,500 (indexed annually) for individuals age 50 and older. However, for high-wage earners, any additional amounts beyond the standard annual limit must be Roth contributions.
Special Limits for Ages 60 to 63
Beginning in 2025, participants in this age group may contribute an additional $3,750 (indexed annually). These contributions must also be Roth if the participant qualifies as a high-wage earner.
Plan Adjustments Needed
Employers will need to update deferral election procedures to comply with the new requirements. If your plan doesn’t allow Roth 401(k) deferrals, high-wage earners won’t be eligible to make catch-up contributions.
How to Prepare for the 2026 Roth Catch-up Rule Change
If you plan to make catch-up contributions in 2026, review your current contribution elections and consider the implications of switching to Roth contributions. We encourage you to consult a financial advisor and tax accountant to understand the impact of these new rules on your retirement plans.
If you have any questions, contact your HR department or plan administrator for further guidance.
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