Roth-Only Catch-Up Contributions Begin in 2026: What Higher Earners Should Be Planning for Now

Catch-up contributions remain one of the most effective tools available to taxpayers age 50 and older who want to accelerate retirement savings and reduce long-term tax risk. However, significant changes under the SECURE 2.0 Act are set to take effect beginning in 2026, and higher-income earners should begin planning now to avoid surprises and missed opportunities. While the new rules are not yet in effect, decisions made in 2024 and 2025 can materially affect how flexible your retirement strategy will be once the changes apply.

As year end approaches, this is an ideal time to review how catch-up contributions fit into your broader tax and retirement plan and whether adjustments should be made before the rules shift.

What Are Catch-Up Contributions and Why They Matter

Catch-up contributions allow individuals age 50 and older to contribute additional amounts to retirement accounts beyond standard IRS limits. These contributions can be made to employer-sponsored plans such as 401(k), 403(b), and 457(b) plans, as well as IRAs and SIMPLE IRAs, subject to account-specific rules.

For many taxpayers, catch-up contributions provide an important opportunity to strengthen retirement savings during peak earning years or to close gaps created earlier in their careers. As annual contribution limits continue to rise, these additional contributions can have a meaningful impact on long-term retirement readiness.

What Changes in 2026 Under SECURE 2.0

Beginning January 1, 2026, a new rule under the SECURE 2.0 Act will change how certain catch-up contributions must be made. Taxpayers age 50 or older who earned more than $150,000 in FICA wages in the prior year will be required to make any catch-up contributions to employer-sponsored retirement plans on a Roth basis rather than a pre-tax basis.

This means standard employee deferrals may still be made on a pre-tax or Roth basis up to the annual limit, but any catch-up contributions above that limit must be made after tax if the income threshold is exceeded. Taxpayers earning $150,000 or less in the prior year will generally be able to continue making catch-up contributions on a pre-tax basis if their plan allows. This Roth-only requirement applies only to employer-sponsored plans and does not currently affect IRAs.

Why Planning Ahead Matters

Although the Roth catch-up requirement does not take effect until 2026, waiting to plan can limit flexibility. Higher earners who expect to exceed the $150,000 wage threshold may want to consider maximizing available pre-tax contributions in 2024 and 2025 while those options remain fully available.

This is also an important time to review how future Roth contributions fit into your long-term strategy, assess the balance between pre-tax and Roth savings, and understand how these changes could affect cash flow and tax exposure once the rules take effect. Addressing these issues now can help avoid administrative complications, unexpected tax increases, and missed savings opportunities in future years.

Plan Now While Flexibility Still Exists

With retirement rules continuing to evolve, December presents a valuable opportunity to review your contribution strategy before changes take effect. Taking action now can help ensure your retirement savings remain aligned with your tax goals and that you are well prepared for the Roth-only catch-up requirement in 2026.

Our team at Strategic Tax Planning works closely with individuals and business owners to navigate SECURE 2.0 changes and develop retirement strategies that balance current tax efficiency with long-term planning objectives. If you would like to discuss how the Roth catch-up rules may affect your situation, we encourage you to contact our team at (202) 455-6010 or schedule a confidential consultation before year end.