If you’re age 50 or older and earning more than $145,000, there’s an important retirement plan change on the horizon.

Starting in 2026, higher-income earners who make “catch-up” contributions to their employer-sponsored retirement plans will be required to make those contributions after taxes to a designated Roth 401(k).

That means you’ll no longer receive a tax deduction for catch-up contributions if your income exceeded $145,000 in the prior year.

Here’s what this rule means and how to prepare before it takes effect.

What are catch-up contributions?

If you’re 50 or older, you can put extra money into your retirement plan beyond the standard contribution limit. In 2025, that means you can contribute up to $31,000 total ($23,500 standard + $7,500 catch-up).

And for workers aged 60 to 63, the catch-up limit will rise even more — to $11,250.

What’s changing in 2026

Today, you can make those extra contributions on a pre-tax basis, lowering your taxable income.
Beginning in 2026, that will only remain true for workers who earned $145,000 or less in the prior year.

If your income was above $145,000, your catch-up dollars will need to go into a Roth 401(k) account. That means you’ll pay taxes now, but qualified withdrawals later in retirement will be tax-free.

Why the rule was delayed

Originally, this rule was supposed to start in 2024. However, the IRS granted a two-year delay to give employers and plan providers time to adapt.

As a result, you can continue making pre-tax catch-up contributions through 2025, no matter your income level.

For some, that delay is an opportunity to maximize one more year of pre-tax savings. For others, it’s extra time to decide whether Roth contributions make sense for their long-term plan.

What you can do now

1. Review your employer plan options​
By 2026, any employer plan that allows catch-up contributions must offer a Roth 401(k) option. Confirm that your plan includes one, or ask your HR department if it will be added.

2. Evaluate your tax strategy​
Roth contributions don’t provide an upfront tax break, but they can create more flexibility later. Converting a portion of your savings to Roth can help manage future taxes in retirement.

3. Consider other vehicles​
If your employer plan doesn’t yet offer a Roth 401(k), you may have other options:

• Contribute to a Roth IRA if your income qualifies
• Use a backdoor Roth conversion if it doesn’t
• Continue saving in a taxable brokerage account, which can still be tax-efficient with the right strategy

Why this matters

This rule change may shift how you think about saving for retirement, especially if you’ve relied on the tax deduction from catch-up contributions.

But it also presents an opportunity. Building after-tax savings in a Roth account can create tax diversification in retirement, giving you more control over how and when you pay taxes later.

The bottom line

Starting in 2026, higher earners who make catch-up contributions will be required to make them in a Roth 401(k).

That means it’s time to review your plan options, understand the tax impact, and decide how Roth contributions fit into your overall strategy.

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​Keeping wealth in focus,

The MY Wealth Management Team