A significant change to retirement savings rules took effect on January 1, 2026, and it directly impacts workers age 50 and older who earn more than $150,000 annually. Under the SECURE 2.0 Act, these high earners must now make all catch-up contributions to their employer-sponsored retirement plans on a Roth (after-tax) basis.
Understanding the New Requirement
Previously, workers could choose whether to make their catch-up contributions to traditional pre-tax accounts or Roth accounts. That flexibility remains for those earning $150,000 or less in FICA wages from the prior year. However, if you earned more than $150,000 in 2025, your 2026 catch-up contributions must go into a designated Roth account.
This rule applies to 401(k), 403(b), and governmental 457(b) plans. Importantly, IRAs are not affected by this change—only employer-sponsored retirement plans.
How the $150,000 Threshold Works
The IRS determines whether you're classified as a "high earner" based on your FICA wages from the previous calendar year. For 2026 contributions, the determining factor is your 2025 wages. The $150,000 threshold is indexed for inflation and increased from the originally proposed $145,000 limit.
Your regular contributions up to the standard $24,500 limit can still be directed to either pre-tax or Roth accounts regardless of your income. The mandatory Roth requirement only applies to the catch-up portion.
2026 Catch-Up Contribution Limits
The IRS raised catch-up contribution limits for 2026:
- Workers age 50 and older: Up to $8,000 in catch-up contributions (increased from $7,500 in 2025)
- Workers ages 60-63: Up to $11,250 under the new "super catch-up" provision
- Total possible contribution (age 50+): $32,500 ($24,500 standard + $8,000 catch-up)
- Total possible contribution (ages 60-63): $35,750 ($24,500 standard + $11,250 super catch-up)
What If Your Plan Doesn't Offer a Roth Option?
Here's a critical issue many workers may face: if your employer's retirement plan does not include a designated Roth account option, high earners cannot make catch-up contributions at all under the new rules.
This means affected employees would be limited to the standard $24,500 contribution limit, potentially missing out on $8,000 to $11,250 in additional tax-advantaged savings. If you earn over $150,000, it's worth confirming with your HR department or plan administrator that your plan includes Roth contribution capabilities.
The Silver Lining: Tax-Free Growth
While the mandatory Roth requirement removes some flexibility, there's a meaningful benefit: Roth contributions grow tax-free, and qualified withdrawals in retirement are also tax-free. For high earners who expect to remain in a similar or higher tax bracket during retirement, this forced Roth treatment could actually work in their favor.
Additionally, Roth 401(k) accounts are no longer subject to required minimum distributions during the owner's lifetime, thanks to another SECURE 2.0 provision—giving high earners more control over their retirement income strategy.
Action Steps for High Earners
- Review your 2025 W-2 to confirm whether your FICA wages exceeded $150,000
- Verify your plan offers Roth contributions—if not, discuss this with your employer
- Update your contribution elections to direct catch-up amounts to your Roth account
- Consider the super catch-up if you're between ages 60 and 63
The IRS expects plans to operate in good-faith compliance with these rules beginning in 2026, with formal regulatory enforcement starting in 2027. Now is the time to ensure your retirement savings strategy aligns with these new requirements.
Sources: IRS.gov, Fidelity, CAPTRUST, Moore Colson