For millions of higher-earning Americans approaching retirement, 2026 brings an unwelcome surprise: a fundamental change to how catch-up contributions work that could significantly impact their tax planning strategies.

Starting this year, workers who earned more than $145,000 in 2025 must make their 401(k) catch-up contributions to Roth accounts only—eliminating the option to defer taxes on these additional savings.

Understanding the Change

The SECURE 2.0 Act, passed in December 2022, included numerous provisions designed to boost retirement savings. But for higher earners, one provision stands out as a clear tax increase.

Previously, workers age 50 and older could choose whether to make catch-up contributions on a pre-tax or Roth (after-tax) basis. That flexibility disappeared for high earners on January 1, 2026.

Here's what the numbers look like for 2026:

  • Standard 401(k) contribution limit: $24,500 (up from $23,500 in 2025)
  • Catch-up contribution for ages 50-59: $8,000
  • Super catch-up for ages 60-63: $11,250
  • IRA contribution limit: $7,500
  • IRA catch-up (50+): $1,100 (up from $1,000)

The Tax Impact

For someone in the 32% federal tax bracket making the full $8,000 catch-up contribution, the switch from pre-tax to Roth means paying an additional $2,560 in federal taxes this year—money that would have compounded tax-deferred under the old rules.

Workers in the 35% or 37% brackets face even steeper immediate costs. And those using the "super catch-up" provision for ages 60-63 could see tax hits exceeding $4,000 annually.

"For higher-income earners who rely on the tax savings from pre-tax 401(k) contributions, this change could have a big impact on their overall tax planning strategy."

— Financial planning experts

The Silver Lining

While the immediate tax hit stings, financial advisors note that Roth contributions do carry long-term advantages:

  • Tax-free growth: All future earnings on Roth contributions grow tax-free
  • Tax-free withdrawals: Qualified distributions in retirement come out completely tax-free
  • No RMDs: Roth 401(k)s are no longer subject to required minimum distributions
  • Estate planning: Heirs can inherit Roth accounts tax-free

For workers who expect to remain in high tax brackets during retirement, or those with long time horizons, the forced Roth conversion may ultimately prove beneficial.

Planning Strategies

Financial advisors suggest several approaches for navigating the new landscape:

Maximize pre-tax contributions first: The standard $24,500 contribution limit remains available on a pre-tax basis regardless of income. Make sure you're capturing all available pre-tax savings before the catch-up kicks in.

Consider backdoor Roth IRAs: High earners can still execute backdoor Roth IRA conversions, allowing additional after-tax savings to benefit from tax-free growth.

Review your overall tax picture: The forced Roth catch-up may warrant adjustments elsewhere in your portfolio to optimize your overall tax situation.

Model retirement tax scenarios: Work with a financial advisor to project whether you'll actually be in a lower tax bracket during retirement—the fundamental question that determines whether Roth or pre-tax contributions make sense.

Other 2026 Changes to Know

Beyond the catch-up contribution change, several other retirement provisions took effect this year:

  • Long-term care exception: Savers under 59½ can now withdraw up to $2,500 annually without penalty to pay for qualifying long-term care insurance
  • Social Security increase: Benefits rose 2.8%, adding an average $56 per month to retirement checks
  • Higher wage cap: The Social Security wage base increased to $184,500

The Bottom Line

The mandatory Roth catch-up provision represents a clear tax increase for high earners, but it's one that carries potential long-term benefits. The key is understanding how the change affects your specific situation and adjusting your retirement strategy accordingly.

As one financial planner put it: "This isn't necessarily bad—it's just different. The workers who thrive will be those who adapt their strategies to the new rules."