A significant shift in retirement savings rules quietly took effect on January 1, 2026, and it could meaningfully impact how millions of high-earning Americans build their nest eggs. Under provisions of the SECURE 2.0 Act, workers age 50 and older who earned more than $150,000 in 2025 must now make all catch-up contributions to Roth accounts rather than traditional pre-tax accounts.

The change represents one of the largest modifications to retirement savings rules in years—and it comes with both challenges and opportunities for strategic savers.

What Changed on January 1

The new rules affect catch-up contributions—the extra amounts workers 50 and older can contribute above standard 401(k), 403(b), and 457(b) limits. Previously, these contributions could go to either traditional (pre-tax) or Roth (after-tax) accounts at the worker's discretion.

Starting in 2026:

  • Income threshold: If your FICA wages exceeded $150,000 in 2025, you must direct all catch-up contributions to a designated Roth account.
  • Regular contributions unaffected: Your standard contributions up to $24,500 can still be made pre-tax if you prefer.
  • No income limit for Roth: Unlike Roth IRAs, there's no income limit for Roth 401(k) contributions—making this a valuable planning opportunity for high earners.

The 2026 Contribution Limits

The IRS has announced increased limits for 2026:

Standard Limits

  • 401(k)/403(b)/457(b) employee contributions: $24,500 (up from $23,500 in 2025)
  • Combined employee + employer limit: $72,000
  • IRA contribution limit: $7,500 (increased from $7,000)

Catch-Up Contributions (Age 50+)

  • Ages 50-59: Additional $8,000 (up from $7,500)
  • Ages 60-63 "Super Catch-Up": Additional $11,250
  • Ages 64+: Additional $8,000 (returns to standard catch-up)

"If you're between 60 and 63, you can kick in an extra $11,250, pushing your max to $35,750. That's a significant opportunity to turbocharge retirement savings during your peak earning years."

— Fidelity Investments retirement planning guidance

The Super Catch-Up Explained

One silver lining of SECURE 2.0 is the new "super catch-up" provision for workers aged 60-63. This four-year window allows substantially higher contributions during what are often peak earning years—and the final stretch before retirement.

Maximum contributions for 2026 by age:

  • Under 50: $24,500
  • Ages 50-59: $32,500 ($24,500 + $8,000 catch-up)
  • Ages 60-63: $35,750 ($24,500 + $11,250 super catch-up)
  • Ages 64+: $32,500 ($24,500 + $8,000 catch-up)

Why the Roth Requirement Matters

The mandatory Roth catch-up for high earners has significant tax implications:

Immediate Tax Impact

Roth contributions are made with after-tax dollars, meaning you won't get a tax deduction this year. For someone in the 35% federal bracket, an $8,000 catch-up contribution that previously reduced taxable income will now result in approximately $2,800 in additional federal taxes.

Long-Term Benefits

However, Roth accounts offer tax-free growth and tax-free withdrawals in retirement. If you expect to be in a similar or higher tax bracket in retirement—or if tax rates rise generally—Roth contributions could produce better after-tax outcomes.

Required Minimum Distributions

Thanks to recent rule changes, Roth 401(k) accounts are no longer subject to required minimum distributions (RMDs) while the original owner is alive, providing additional flexibility in retirement.

Transition Period and Employer Readiness

The IRS has granted employers a "good faith" compliance grace period through 2026, with full enforcement beginning in 2027. This gives plan administrators time to update systems and communications.

However, workers should not wait to act. If your plan doesn't yet have a Roth option (some still don't), your ability to make catch-up contributions could be temporarily suspended until the plan is updated.

Strategic Considerations

For workers affected by the new rules, consider these strategies:

  • Maximize 2026 contributions early: Front-loading contributions ensures you capture the full benefit regardless of job changes or plan issues later in the year.
  • Review your Roth allocation: This might be an opportune time to direct more of your regular contributions to Roth as well, building a larger tax-free retirement pool.
  • Coordinate with other accounts: Roth IRAs, health savings accounts (HSAs), and taxable accounts all have different tax treatments. A holistic approach optimizes after-tax wealth.
  • Consider Roth conversions: If you're converting traditional IRA assets to Roth anyway, the additional Roth catch-up contributions complement that strategy.

The new rules add complexity to retirement planning, but they also create opportunities for tax diversification that weren't previously available to high earners. Working with a financial advisor or tax professional can help optimize your approach for 2026 and beyond.