Starting January 1, 2026, a SECURE 2.0 provision requires 401(k) participants age 50 or older who earned more than $150,000 in FICA wages from their employer the prior year to make any catch-up contributions on a Roth (after-tax) basis instead of pre-tax. It doesn't touch your regular contribution limit — only the extra "catch-up" amount available once you turn 50.
The short version: if you earned over $150,000 in wages last year and are 50+, any catch-up contribution above the standard 401(k) limit now goes in after tax, meaning you lose the upfront deduction but the money (and its growth) comes out tax-free in retirement. Earn $150,000 or less, and your catch-up can still go in pre-tax as before.
Who exactly is affected
The threshold is $150,000 in FICA wages from your common-law employer in the prior calendar year — not your household income, not investment income, and generally not combined wages from a second job unless your specific plan document allows aggregation across related employers. It's worth checking your actual prior-year W-2 wages against this number rather than assuming your salary alone tells the whole story, especially if bonuses or other compensation push you close to the line.
If you're 50 or older and at or under $150,000, nothing changes for you — you can still choose pre-tax or Roth for your catch-up contribution, same as before this rule existed.
What "Roth catch-up" actually means for your paycheck
A pre-tax catch-up contribution reduces your taxable income this year, and you pay ordinary income tax when you withdraw it (plus its growth) in retirement. A Roth catch-up contribution is the reverse: it's added to your paycheck's taxable income now, so you pay tax on it this year, but qualified withdrawals in retirement — including all the growth — are completely tax-free.
For an affected high earner, this means: the same dollar amount contributed now results in a smaller net paycheck this year (since there's no upfront deduction), in exchange for that money growing and coming out tax-free decades later. Whether that trade is good for you depends heavily on whether you expect your tax rate to be higher or lower in retirement than it is now.
The 2026 numbers
| Contribution type | 2026 limit |
|---|---|
| Standard 401(k) employee deferral | $24,500 |
| Catch-up, age 50+ | +$8,000 ($32,500 total) |
| "Super" catch-up, ages 60–63 | +$11,250 ($35,750 total) |
The catch-up amount itself didn't shrink under this rule — a 55-year-old high earner can still contribute up to $32,500 total. What changed is purely the tax treatment of the $8,000 (or $11,250) catch-up portion once you're over the wage threshold.
What if your plan doesn't offer Roth contributions?
Employers are in a bind here: a 401(k) plan that has never offered a Roth option now has to either add one, or lose the ability to accept catch-up contributions from any affected high-earning employee — pre-tax catch-up included, not just Roth. This is pushing a fair number of small and mid-size employer plans to add Roth 401(k)s this year specifically to keep the catch-up benefit available to their higher-paid staff at all.
If you're not sure whether your plan offers Roth contributions yet, that's worth asking HR or your plan administrator directly rather than assuming — the answer determines whether you can make a catch-up contribution this year at all.
A worked example
Take someone age 55 earning $180,000 in FICA wages last year — over the $150,000 threshold — who wants to contribute the full $8,000 catch-up on top of the standard $24,500 limit. Under the new rule, that entire $8,000 must go in as Roth. At a illustrative 32% marginal federal rate, that means roughly $2,560 more in current-year tax withholding than if that same $8,000 had gone in pre-tax — money that would otherwise have been deferred. In exchange, that $8,000 (and everything it earns between now and retirement) comes out completely tax-free later, with no tax bill waiting at withdrawal.
Should this change what you do?
- If you expect a similar or higher tax rate in retirement: the Roth requirement isn't much of a downside — you were arguably better off in Roth anyway.
- If you expect a meaningfully lower tax rate in retirement: you're losing some value compared to the old pre-tax option, but the choice of whether to contribute the catch-up at all is still yours — the tax-advantaged growth is still worth having for most people in this position.
- Either way, check your plan's Roth availability now rather than waiting until year-end, since a plan that isn't ready could block your catch-up contribution entirely.