Age 50+ and Saving More for Retirement? A New Roth Rule May Apply

If you are age 50 or older and taking advantage of catch-up contributions to your workplace retirement plan, an important change under the SECURE 2.0 Act may affect how some of those contributions are made in 2026.

For 2026, employees participating in most 401(k), 403(b), and governmental 457 plans can contribute up to $24,500 through regular elective deferrals. Employees age 50 and older may generally contribute an additional $8,000 in catch-up contributions, bringing their potential employee contribution total to $32,500.

A New Roth Requirement for Certain Higher Earners

Beginning in 2026, some higher-earning employees who make catch-up contributions must make those additional contributions on a Roth basis.

For 2026, the rule generally applies if:

• You are eligible to make catch-up contributions; and
• Your 2025 FICA wages from the employer sponsoring the retirement plan exceeded $150,000.

If both conditions apply, your 2026 catch-up contributions generally must be designated as Roth contributions. The $150,000 threshold is based on prior-year wages from the employer sponsoring the plan, rather than overall household income.

Importantly, this requirement applies to the catch-up portion of the contribution. It does not mean that all of an employee’s regular 401(k) contributions must be made as Roth contributions.

An Extra Catch-Up for Ages 60–63

SECURE 2.0 also provides an enhanced catch-up opportunity for certain employees who reach ages 60, 61, 62, or 63 during the year.

For 2026, eligible participants in most 401(k), 403(b), and governmental 457 plans may make catch-up contributions of up to $11,250 instead of the standard $8,000 catch-up amount. That could allow an eligible participant to contribute as much as $35,750 through employee deferrals for the year.

A Good Time to Review Your Elections

As year-end approaches, employees who are age 50 or older may want to review their retirement plan elections, particularly if they are trying to maximize their 2026 contributions. Higher earners should also confirm that any required catch-up contributions are being processed as Roth contributions.

Retirement plan provisions can vary, and individual tax circumstances differ. If you have questions about how these changes may affect your retirement or year-end tax planning, please contact DBMCPA or your retirement plan administrator.