What’s Changing?
Catch-up contributions let older workers save more than the standard IRS limit.
To give some context, in 2025:
- The standard contribution limit is $23,500
- The catch-up for ages 50 and older is $7,500 (on top of the standard limit)
- The catch-up for ages 60–63 is $11,250 (on top of the standard limit)
Starting in 2026, how you make the catch-up contributions—pre-tax or Roth (after-tax)—will depend on your income from the previous year.
If your wages from the prior year did not exceed $145,000, catch-up contributions can still be made as pre-tax or Roth.
However, if your prior-year wages exceeded $145,000, catch-up contributions must be made as Roth. If your employer’s plan doesn’t offer a Roth option, you won’t be able to make catch-up contributions until a Roth option is added.
The IRS will release 2026 contribution limits later this year.
Which Plans Are Affected?
This rule applies to:
- 401(k) plans
- 403(b) plans
- Governmental 457(b) plans
Why It Matters
The difference between pre-tax and Roth contributions is all about tax timing:
- Pre-tax: Lowers your taxable income now; taxed when withdrawn.
- Roth: Made with after-tax dollars; withdrawals may be tax-free in retirement.
This change doesn’t affect regular contributions—those can still be pre-tax or Roth, regardless of income.
The Bottom Line
This rule only affects catch-up contributions—and only for those earning over $145,000 in the previous year from their employer. While it may mean less pre-tax savings now, it could also lead to valuable tax-free income in retirement.
For many, nothing will change. But if you think this will affect you, it’s a good time to check your plan’s contribution options and talk to your HR or benefits team to prepare for the 2026 changes.