If you’re age 50 or older, catch-up contributions to your retirement plan are one of the best ways to boost your nest egg before retirement. However, it’s important to be aware of the 2026 catch-up contribution rule changes. Beginning in 2026, the rules are changing, especially for higher earners. These updates, tied to the SECURE 2.0 Act, could impact how you save, how much you owe in taxes today, and what your retirement income looks like in the future. 

Here’s a breakdown what’s changing and what it means for you. 

New Roth Requirement for High Earners 

Starting January 1st, 2026, workers who earn more than $145,000 in prior-year W-2 wages (indexed for inflation) and are age 50 or older will be required to make catch-up contributions on a Roth basis in their employer-sponsored retirement plan. 

What this means: 

• Your regular 401(k) contributions can still be made pre-tax. 

• But any extra catch-up contributions must go into a Roth account. 

• Roth contributions are made with after-tax dollars, so you pay taxes now, but withdrawals in retirement are tax-free. 

• If your income is $145,000 or less, you’ll still be able to make catch-up contributions pre-tax, as before.  

Note: This $145,000 threshold only applies to W-2 wages. If you’re self-employed or a business owner without W-2 income, different rules may apply (see below). 

Why the Change? 

Instead of allowing high earners to delay taxes through pre-tax contributions, the government collects the tax upfront. 

For savers, the trade-off is that Roth contributions offer long-term benefits: 

• Tax-free growth and withdrawals in retirement 

• No required minimum distributions (RMDs) from Roth 401(k)s once rolled into a Roth IRA 

• Potential estate planning advantages, since Roth IRA accounts can pass to heirs tax-free (though they must be emptied within 10 years) 

• Important Note: Roth 401k(s) are subject to RMDs, but once rolled into a Roth IRA, these RMDs are no longer required.  

Contribution Limits and the “Super Catch-Up” 

For 2025, contribution limits allow: 

• $23,500 in standard 401(k) contributions (50 and under) 

• +$7,500 in catch-up contributions for those 50 and older 

• Total = $31,000 for 50+ savers 

Starting in 2025, a special “super catch-up” applies to workers age 60–63. They can contribute up to 150% of the standard catch-up limit. In 2025, that means up to $11,250 in catch-ups. By 2026, this number could increase due to inflation adjustments. 

Important: If you’re a high earner in that age group, these catch up contributions must be Roth. 

What If Your Plan Doesn’t Offer a Roth Option? 

Here’s a wrinkle: not all workplace retirement plans include a Roth feature. The IRS has clarified that employers are not required to add Roth accounts just to meet this rule. 

That means: 

• If your plan doesn’t offer a Roth option and you earn over $145,000, you may lose access to catch-up contributions entirely. 

• If you earn less than $145,000, you can continue making pre-tax catch-ups, regardless of whether your plan has Roth. 

• Important Note: If you’re affected, encourage your employer to add a Roth feature before 2026 so you can continue making catch-up contributions.  

What if You’re Self-Employed? 

The $145,000 income threshold for mandatory Roth catch-up contributions applies only to W-2 wages, not self-employment income or K-1 income.  

• If you’re self-employed and do not pay yourself W-2 wages (such as a sole proprietor or a partner), the Roth Catch up rule does not apply  

• Important Note: If you operate an S-Corporation and pay yourself W-2 wages over $145,000, you are subject to the Roth catch-up requirement 

• Important Note: For those using a Solo 401(k) or Individual 401(k), the plan must include a Roth feature to make Roth catch-up contributions 

• Action Item: Many Solo 401(k) plans do not include a Roth option by default. If you want to make Roth catch-up contributions in the future, check with your plan provider now and amend the plan if needed.  

How This Might Affect Your Retirement Strategy 

These changes may feel like a setback, but for many high earners, Roth contributions can be a smart long-term move. Here’s why: 

• If you expect higher taxes later, paying taxes now could save you money. 

• Roth money is more flexible for retirement income planning, since it doesn’t add to your taxable income when withdrawn. 

• For estate planning, Roth assets may be more efficient to leave to heirs than traditional retirement accounts. 

That said, some savers may rethink catch-up contributions altogether, especially if they prefer the immediate tax deduction of pre-tax contributions. Others may consider directing extra funds into taxable brokerage accounts, where money isn’t locked away until retirement. 

Key Takeaways 

• Beginning in 2026, workers earning more than $145,000 in prior-year W-2 wages must make catch-up contributions to a Roth 401(k). 

• Regular 401(k) contributions remain unchanged—only catch-up contributions are impacted. 

• Workers aged 60–63 will see higher “super catch-up” limits, but high earners must use Roth for all of it. 

• If your employer plan doesn’t offer Roth, and your income exceeds the threshold, you may not be able to make catch-up contributions at all. 

• Self-Employed individuals may not be subject to the catch-up rule, depending on how they structure their compensation, but should ensure their Solo 401(k) includes a Roth Option if they plan to make catch-up contributions 

What You Can Do Now 

• Check if your plan offers a Roth option—if it doesn’t, you may want to encourage your employer to add one. 

• Review your 2025 W-2 income to see if you’ll cross the $145,000 threshold for 2026. 

• Revisit your tax strategy—decide whether paying taxes now for Roth contributions aligns with your retirement goals. 

• If self-employed, confirm your Solo 401(k) plan includes a Roth feature 

At Navalign Wealth Partners, we can help you review your savings strategy, take advantage of higher limits, and ensure your retirement plan stays on track. Schedule a complimentary consultation today to see how the latest changes could strengthen your long-term financial goals.