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Retirement savers aged 50 and up get to put extra money into a 401(k) each year, a perk called the catch-up contribution. For higher-paid workers, that extra money is about to lose its pre-tax treatment. The shift changes take-home pay without changing how much gets saved.
The wage line that decides it
Workers 50 or older whose prior-year wages from the employer sponsoring the plan topped $150K must make catch-up contributions as Roth, meaning after-tax. The Internal Revenue Service set the 2026 figure at $150K, indexed up from the original $145K.
The test looks only at wages from the employer running the plan. Someone who switched jobs and had no 2025 wages from the new employer generally isn't covered there this year.
Only the catch-up slice is affected. Regular contributions can still go in pre-tax or Roth under the plan's normal options.
The Treasury Department and the tax agency published final regulations on the requirement, after a two-year delay from the original 2024 start date. The delay gave plan administrators time to rebuild their systems.
What the dollars look like
The 2026 limits run $24.5K for regular deferrals and $8K for the age 50-plus catch-up. Workers aged 60 to 63 get a larger super catch-up of $11.25K, generally 150% of the standard amount.
Stacking the base limit and the enhanced catch-up gets a 60-year-old to total contributions of $35.75K in 2026. Over the wage line, that catch-up portion goes in after-tax.
Roth money doesn't cut current taxable income. It comes out tax-free later, which is the trade for the smaller paycheck now.
The mandate covers 401(k), 403(b), and governmental 457(b) plans. Individual retirement accounts are untouched and keep their own limits of $7.5K plus a $1.1K catch-up.
Checking the plan before January
The biggest risk is a plan with no Roth feature at all. Where that's the case, affected employees lose the ability to make catch-up contributions entirely once the rule takes effect.
So the move is a call to the benefits team to confirm two things. First, that the plan offers a Roth 401(k) option. Second, that it has been amended to allow the enhanced super catch-up for ages 60 to 63, which needs its own amendment language.
The deadline for amending plans to reflect the SECURE 2.0 changes is Dec. 31, 2026. Recent guidance from September 2026 hints the Roth amendment deadline could be extended, though sponsors are being told to proceed anyway.
The second move is a payroll check. A deduction that flips from pre-tax to Roth produces a different paycheck even when the contribution amount holds steady. Running the new net pay figure before January avoids a surprise in the first check of the year.
For anyone whose wages sit just under the threshold, the line moves. The Roth-mandate wage figure is expected to rise to $155K in 2027, with the 401(k) base limit projected at $25.5K and the age 50-plus catch-up at $8.5K. The super catch-up is projected at $11.75K.
Those figures remain projections. The tax agency typically releases official retirement numbers in November using September inflation data, so confirmation lands before the plan year starts.
Another 2027 change is already generating mail. The agency is sending CP321J notices about the new Saver's Match program, which replaces the existing tax credit with a direct federal deposit of up to $1K into a retirement account.
The match goes into the account regardless of tax liability, and notices are going to people who might qualify based on 2025 data. Check plan documents and current requirements with the employer before changing any deferral election.
