If you are 50 or older, earn a high salary, and like to top up your 401(k) with extra “catch-up” contributions, a rule that was delayed for years finally applies in 2026. Starting with the 2026 tax year, if your prior-year wages from your employer were high enough, your catch-up contributions can no longer go in pre-tax. They must go in as Roth (after-tax) money instead. This comes from Section 603 of the SECURE 2.0 Act, and the IRS locked in the details with final regulations published on September 16, 2025.
Here is the plain-English version, the exact 2026 numbers we verified against the IRS, and a worked example of what the change does to your paycheck.
Who is affected: the $150,000 wage line
The number everyone quotes is $145,000, because that is the figure written into the SECURE 2.0 law. But that figure is indexed for inflation, and the IRS has already moved it up. For the 2026 tax year the operative threshold is $150,000, per IRS Notice 2025-67. If you have seen “$145,000” in older articles, that was the base amount, not the 2026 number.
The test works like this:
- Look at your Social Security wages (the FICA wages in Box 3 of your W-2) from a single employer for the prior year. FICA is the payroll tax that funds Social Security and Medicare.
- For 2026 catch-up contributions, that prior year is 2025.
- If those 2025 wages were more than $150,000, then every catch-up dollar you put into that employer’s 401(k), 403(b), or governmental 457(b) plan in 2026 must be Roth.
Two details are easy to miss:
- It is per employer, not your total income. If you earned $90,000 at each of two jobs in 2025 (that is $180,000 combined) but never crossed $150,000 at a single employer, neither plan triggers the rule.
- It is based on FICA wages. Self-employment income is not FICA wages from an employer, so a sole proprietor with no W-2 wages from the plan sponsor is generally not caught by this specific test. If you are fuzzy on what counts, our FICA guide breaks it down.
If your 2025 wages were $150,000 or below, nothing changes. You can still make catch-up contributions pre-tax if your plan allows it.
What actually changed, and when
The Roth catch-up requirement was in SECURE 2.0 from the beginning, but the IRS gave employers an administrative transition period (Notice 2023-62) that ran through December 31, 2025. That grace period is over. The requirement is now in force for tax years beginning after December 31, 2025, which means 2026 onward.
The final regulations, published in the Federal Register on September 16, 2025, formally apply to contributions in tax years beginning after December 31, 2026 (so 2027). In the gap, the IRS expects “reasonable good faith compliance,” which is why many plans are phasing the change in during 2026 rather than waiting. Translation: if you are a high earner, expect your plan to switch your catch-up to Roth sometime in 2026, even though the fine print of the regulation technically binds from 2027.
The paycheck and tax impact
Pre-tax and Roth are taxed at opposite ends. Pre-tax lowers your taxable income now and is taxed later; Roth is taxed now and comes out tax-free later.
| Feature | Pre-tax catch-up (the old default) | Roth catch-up (required for high earners in 2026) |
|---|---|---|
| Tax on money going in | Deducted now, lowers this year’s taxable income | Taxed now, no deduction |
| Tax on an $8,000 catch-up at a 24% rate | You save $1,920 this year | You pay $1,920 this year |
| Growth | Tax-deferred | Tax-free |
| Withdrawals in retirement | Taxed as ordinary income | Tax-free if qualified |
| Who it applies to in 2026 | Savers with 2025 wages of $150,000 or less | Savers whose 2025 FICA wages from that employer topped $150,000 |
Worked example. Say you are 55, your 2025 W-2 Social Security wages were $160,000, and you are in the 24% federal marginal bracket (the rate on your next dollar of income). You want to make the full 2026 age-50+ catch-up of $8,000.
- Old way (pre-tax): the $8,000 lowers your taxable income, saving you $8,000 times 24% = $1,920 in federal income tax this year.
- New way (Roth, now required): no deduction. You pay that $1,920 now. The catch-up costs you about $1,920 more in current-year taxes than it used to.
That is the whole near-term sting: you lose the upfront deduction on your catch-up dollars. If you are aged 60 to 63 and eligible for the larger $11,250 “super” catch-up, the pre-tax deduction you give up at a 24% rate is $11,250 times 24% = $2,700.
The 2026 numbers, verified against the IRS
| 2026 contribution type | Amount | What it is |
|---|---|---|
| Elective deferral limit (Section 402(g)) | $24,500 | The base employee limit for 401(k)/403(b)/457 plans |
| Age 50+ catch-up | $8,000 | Extra room once you turn 50 |
| Ages 60-63 “super” catch-up | $11,250 | A larger catch-up for those four ages only |
| Roth catch-up wage threshold | $150,000 | 2025 wages above this force your catch-up to be Roth |
Stacking it up: a worker who is 55 and over the wage line can still put in $24,500 + $8,000 = $32,500 in 2026, but the $8,000 catch-up portion must be Roth. A worker aged 60 to 63 can put in $24,500 + $11,250 = $35,750, with the $11,250 as Roth.
The long-term upside is real
Losing the deduction stings now, but Roth money grows tax-free and comes out tax-free in retirement if the withdrawal is qualified. That single $8,000 catch-up, left alone for 15 years at an assumed 7% annual return (an illustration, not a promise), would grow to about $22,000, and in a Roth none of that is taxed when you withdraw it. In a pre-tax account, that same $22,000 would be taxed as ordinary income on the way out. So the $1,920 of tax you pay now buys tax-free treatment on a much larger sum later. You can model your own numbers with our retirement calculator.
Whether pre-tax or Roth wins for you depends on your tax rate now versus in retirement. Our guide on traditional vs Roth 401(k) walks through that trade-off, and 401(k) vs IRA covers where else catch-up money can go.
What about 2027? (the honest caveat)
Every figure above is fixed 2026 law. The 2027 versions are not official yet. The IRS sets these limits each autumn, so the 2027 elective deferral limit, the catch-up amounts, and the wage threshold (which could rise above $150,000 again) will not be confirmed until a new IRS notice lands around October or November 2026. Anyone quoting exact 2027 catch-up numbers today is estimating. We take the same care with other moving targets, such as our note on the 2027 Social Security COLA estimate.
FAQ
Does this mean I can no longer make catch-up contributions?
No. You can still make them, and the limits went up for 2026. The only change for high earners is the tax treatment: your catch-up goes in as Roth (after-tax) instead of pre-tax. Everything else about catch-ups is the same.
I made exactly $150,000 in 2025. Am I subject to the rule?
No. The rule applies when prior-year FICA wages are more than $150,000. At exactly $150,000 you are at the line, not over it, so your 2026 catch-up can still be pre-tax if your plan allows it.
My plan does not offer a Roth option. What happens?
Under the IRS rules, if a plan does not allow Roth contributions, affected high earners simply cannot make catch-up contributions in that plan until it adds a Roth feature. Most large plans have added, or are adding, Roth to avoid shutting savers out. Ask your plan administrator where yours stands for 2026.
Does the $150,000 threshold count my spouse’s income or my side income?
No. It looks only at the Social Security (FICA) wages a single employer paid you in the prior year. Spousal income, investment income, and self-employment income are not part of this particular test.
Sources
IRS Notice 2025-67, published in Internal Revenue Bulletin 2025-49, is the primary source for the 2026 dollar figures used here: the $24,500 elective deferral limit, the $8,000 age-50+ catch-up, the $11,250 catch-up for ages 60 to 63, and the $150,000 Roth catch-up wage threshold that replaced the $145,000 statutory base (accessed August 10, 2026). The IRS newsroom release IR-2025-111 confirms the same $24,500, $8,000, and $11,250 figures in plain HTML (accessed August 10, 2026). The final regulations titled “Catch-Up Contributions,” published in the Federal Register on September 16, 2025, are the primary source for the SECURE 2.0 Section 603 Roth catch-up requirement, the $145,000 indexed base, the November 17, 2025 effective date, and the fact that the regulations apply to tax years beginning after December 31, 2026 while the statutory requirement itself is in force for 2026 (the earlier transition period ended December 31, 2025) (accessed August 10, 2026).
