If you are 50 or older and rely on catch-up contributions to trim your tax bill, big changes are coming. Starting in 2026, older workers who earned more than a set amount from their employer in the prior year will no longer be able to make pre-tax catch-up contributions to workplace retirement plans. Those extra dollars will have to go into the plan’s Roth side instead, which means no upfront deduction and higher taxable income in the year you contribute.
Congress baked this shift into the SECURE 2.0 Act to raise near-term tax revenue and to push broader use of Roth accounts. The rule was originally slated for 2024, but the IRS granted a two-year administrative delay to give employers and payroll systems time to adapt. The Roth-only requirement for high earners’ catch-ups now begins in 2026.
What catch-up contributions are today
Catch-up contributions are an added savings opportunity for people age 50 and up in 401(k), 403(b), and governmental 457(b) plans. They sit on top of the standard salary deferral limit and are designed to help late-career workers build or rebuild retirement balances.
Under current rules, you can direct catch-up dollars to either the pre-tax or Roth bucket if your plan offers both. Pre-tax reduces current taxable income and defers tax until withdrawal. Roth is taxed now, then grows and can be withdrawn tax-free in retirement if requirements are met. For 2025, the standard employee deferral limit is $23,500, and the general catch-up limit is $7,500, both indexed to inflation. SECURE 2.0 also created a special, higher catch-up for ages 60 to 63 starting in 2025, equal to the greater of $10,000 or 150 percent of the regular catch-up. With a $7,500 regular catch-up, that would be $11,250 for those specific ages in 2025.
How the new Roth-only rule will work in 2026
The core change is simple. If your prior-year wages from the plan sponsor exceed a threshold, any catch-up contributions you make in the following year must be Roth. The threshold is set at $145,000 and will be indexed for inflation. It is based on W-2 wages paid by the employer that sponsors the plan, measured for the calendar year before you make the catch-up.
This employer-by-employer test matters. If you had high W-2 wages from Employer A last year, your catch-ups in Employer A’s plan must be Roth this year. If you also work for Employer B and earned less than the threshold there, Employer B’s plan could still allow you to choose pre-tax or Roth for your catch-up. The requirement applies only to catch-up contributions. Your regular deferrals up to the standard limit can remain pre-tax, Roth, or a mix, subject to plan features.
Plans that do not currently offer a Roth option will need to add one or else block catch-up contributions for workers who cross the income line once the rule takes effect. The IRS delayed the start date to 2026 so recordkeepers, payroll providers, and employers can update systems and participant elections.
Who is affected and who is not
You may feel this change if you are age 50 or older, participate in a 401(k), 403(b), or governmental 457(b), and had prior-year W-2 wages from that plan’s sponsor above the inflation-adjusted threshold. High earners who counted on catch-ups to lower their current tax bill will lose that specific upfront deduction.
You are not affected by this rule if your prior-year wages from the plan sponsor fall below the threshold, even if your household income is higher due to a spouse or outside earnings. The rule also does not alter IRA catch-up rules. And it does not force your regular salary deferrals to be Roth. It only changes the tax treatment of the catch-up portion for those who cross the wage line.
Planning moves to consider before 2026
First, confirm whether your plan already offers a Roth account and how it will handle the change. If it does not, ask about the employer’s timeline for adding Roth functionality, since that will determine whether catch-ups remain available to you in 2026.
Second, map out the tax impact. Moving a $7,500 catch-up from pre-tax to Roth raises your taxable income by that same amount in the year you contribute. For some, that could affect quarterly estimates, withholding, eligibility for certain credits, or Medicare IRMAA brackets. Adjust withholding or estimated taxes ahead of time to avoid surprises.
Third, consider your broader Roth strategy. If you are already on track for strong pre-tax balances, being nudged toward Roth catch-ups could be a net positive for future tax flexibility. Roth assets are not subject to required minimum distributions for beneficiaries in the same way as pre-tax, and qualified withdrawals are tax-free. Workers age 60 to 63 should also evaluate the enhanced catch-up available starting in 2025 when deciding how much to contribute and in which tax bucket.
Finally, remember the threshold is based on prior-year W-2 wages from the sponsoring employer. If you expect a temporary dip below that level, you may have a window to use pre-tax catch-ups again. Conversely, a promotion or large bonus could push you over the line and make Roth mandatory for catch-ups the following year.
Why Congress changed the rules
The shift toward Roth catch-ups serves two policy goals. It increases near-term tax revenue because contributions are taxed today rather than deferred for decades. It also broadens the use of Roth accounts so more retirees can hold a mix of pre-tax and after-tax assets.
For savers, the headline is practical. The option to deduct catch-up contributions will soon be off the table for many higher earners. With the rule taking effect in 2026, you still have time to coordinate with HR, update your elections, and plan for the tax change, while continuing to take advantage of the powerful contribution limits available after age 50.
