A SECURE 2.0 provision the industry has been bracing for since 2022 finally went live on January 1, 2026: high earners who want to make catch-up contributions to their 401(k), 403(b), or governmental 457(b) plan must now do so on a Roth basis. The pretax catch-up — long a staple of late-career tax planning — is off the table for anyone above the income threshold.
The Threshold and How It Works
The rule applies to plan participants age 50 or older whose prior-year FICA wages from the plan-sponsoring employer exceeded $150,000. The IRS quietly bumped that figure up from the original $145,000 statutory floor in November 2025 to reflect cost-of-living adjustments. The threshold is measured employer-by-employer, and self-employment income does not count as FICA wages for this test.
If you cleared $150,000 in W-2 FICA wages with your current employer in 2025, every dollar of catch-up you put into your workplace plan in 2026 must go into the Roth bucket — meaning it is taxed today rather than deferred.
What That Costs in 2026
The numbers are larger than they have ever been. For 2026, the regular employee deferral limit is $24,500, and the standard age-50 catch-up is $8,000, for a combined ceiling of $32,500. SECURE 2.0's "super catch-up" for workers age 60 through 63 stays at $11,250, putting the maximum at $35,750 for that age band.
For a high earner in the 32% federal bracket, losing the pretax treatment on an $8,000 catch-up means roughly $2,560 in additional federal tax this year — money that previously stayed invested and was taxed only on withdrawal.
Why the Government Made This Change
Congress wanted to tilt the highest-income savers toward after-tax retirement contributions. The thinking: the lost current-year deduction generates federal revenue now, while Roth balances grow tax-free and produce no future deduction loss. For Washington, it is a scoring win. For savers, it accelerates the tax bill but eliminates it on the back end.
Practical Takeaways
- Confirm your plan accepts Roth deferrals. If it does not, the rule does not give your employer a pass — it bars you from making catch-up contributions at all until the plan is amended. Ask HR before your first payroll of the year.
- Treat your 2025 FICA wages as the trigger. What matters for 2026 eligibility is what you earned last year at your current employer, not your projected 2026 income.
- Re-run the Roth-versus-pretax math. If you expect to be in a lower bracket in retirement, the forced Roth treatment is a real cost. If you expect rates to rise or to stay in a high bracket, the rule may simply codify what you would have chosen anyway.
- Coordinate with a backdoor or mega-backdoor Roth. High earners already shut out of direct Roth IRA contributions can still use the backdoor route, and some workplace plans permit after-tax contributions with in-plan Roth conversions. The mandatory Roth catch-up changes the relative attractiveness of these strategies.
- Check the age-60-to-63 super catch-up. Workers in that band can shelter the most, but the Roth requirement applies just as forcefully to that larger contribution.
- Watch for mid-year job changes. Because the wage test is employer-specific, a new job in 2026 could reset whether you are subject to the mandate at your new employer for 2027.
The Roth catch-up rule does not change how much you can save — only how it is taxed on the way in. For workers near retirement who have been counting on a deduction, 2026 is the year to model the after-tax impact and consider whether to redirect savings into a taxable brokerage, an HSA, or precious-metals or other alternative IRAs that are unaffected by the FICA wage test.
Sources: Internal Revenue Service, Fidelity, Charles Schwab, Manulife John Hancock Retirement, Ed Slott and Company