Workers 50+ earning over $150,000 must place 2026 401(k) catch-up contributions in Roth accounts

Starting in 2026, employees aged 50 and older who earned more than $150,000 in 2025 and who make contributions beyond the standard limit must deposit those extra 401(k) catch-up contributions into a Roth 401(k), meaning no upfront tax deduction and potentially lower take-home pay, tax experts say.

The rule, part of the SECURE 2.0 law enacted in 2022 and effective Jan. 1 after a delay, applies to 401(k) plans as well as 403(b) and government 457(b) plans but not to individual retirement accounts. In 2026 the standard contribution cap is $24,500 and the basic catch-up is $8,000, for a total of $32,500; workers aged 60 to 63 may make larger "super" catch-up contributions of up to $11,250, for a total of $35,750.

Who is subject is determined by Box 3 on a worker’s 2025 W-2, tax experts say, and other income such as 1099 or K-1 earnings generally do not count. Some employers will automatically route excess contributions into a plan’s Roth feature while others may require employee consent; if an employer’s plan has no Roth option, workers above the threshold cannot make catch-up contributions to that job-based plan, the Plan Sponsor Council of America said.

Experts noted trade-offs: Roth catch-ups offer long-term tax-free withdrawal potential and flexibility — Angela Capek of Fidelity said there has been no required withdrawals from Roth 401(k)s since 2024 — but Tom O’Saben of the National Association of Tax Professionals warned of higher near-term tax bills.

Key Topics

Business, Catch-up Contributions, Fidelity Investments, Plan Sponsor Council