The 2026 Roth Catch-Up Rule: What 401(k) Savers Over 50 Earning $150,000+ Must Know

By Vivian London, London's Tax Services | 10/27/2026

If you are 50 or older, earn a good salary and max out your 401(k), look closely at your pay stub. Starting in 2026, a rule from the SECURE 2.0 Act changes how your catch-up contributions work: if you earned more than $150,000 in wages from your employer last year, the extra catch-up money must go in as Roth, after tax. No more upfront deduction on that slice. Many people only notice in January, when their W-2 shows a higher taxable wage than they expected.

The short version: For 2026, the 401(k) limit is $24,500, plus an $8,000 catch-up at 50 or older, or $11,250 at ages 60 to 63. If your 2025 FICA wages from the employer that sponsors the plan were over $150,000, your catch-up contributions must be Roth. Your regular $24,500 can still be pre-tax. If your plan has no Roth option, you cannot make catch-up contributions at all. The 2027 limits are not official yet; early projections put the base limit near $25,500.

The 2026 numbers

The IRS announces the official 2027 limits in late October or November. We will update this table when it does.

Who the Roth catch-up rule applies to

All three must be true:

1. You are 50 or older by the end of the year and making catch-up contributions.
2. Your prior-year FICA wages (Social Security wages, box 3 of your W-2) from the employer sponsoring the plan were over the threshold: $150,000 in 2025 for the 2026 rule.
3. Your plan is a 401(k), 403(b) or governmental 457(b).

A few details matter a lot:

• It is per employer, not per household. A married couple each earning $140,000 is not affected, even though they make $280,000 together.
• Bonuses and stock vesting count. A $140,000 salary plus $50,000 of RSUs that vested in 2025 is $190,000 of FICA wages.
• A new job resets it. If you changed employers, wages from your old job do not count at the new one.
• Only the catch-up must be Roth. The first $24,500 can still be pre-tax.

What it costs you

The Roth catch-up loses the deduction now in exchange for tax-free withdrawals later. In the 24% federal bracket, with New York tax on top, you are giving up roughly 30 cents per dollar of deduction today:

• A Westchester manager, age 55, who earned $180,000 in 2025: the $8,000 catch-up as Roth adds about $2,400 to her 2026 tax bill.
• At age 61, the $11,250 super catch-up as Roth adds about $3,400.

That is not wasted money. Roth dollars grow and come out tax-free in retirement, and they help diversify a balance that is otherwise all pre-tax. But it is cash out of pocket this year, so plan for it.

If your plan has no Roth option

This is the trap. If your employer's plan does not offer Roth contributions, an employee over the threshold cannot make catch-up contributions at all in 2026. Ask HR whether the plan added a Roth feature. If you own the business, adding one is usually a simple plan amendment.

Business owners: S corp vs sole proprietor

• S corporation owners pay themselves W-2 wages, so the test applies. If your 2025 salary from your S corp was over $150,000, your 2026 catch-up in the company plan must be Roth. Your salary level now affects more than payroll tax; see our S corp tax guide.
• Sole proprietors and partners whose only income from the business is self-employment income generally have no FICA wages from it, so the wage test does not reach them. Confirm with your plan administrator or tax advisor before you rely on that.
• If you sponsor a 401(k) for employees, your payroll provider must identify who crossed $150,000 last year and route their catch-ups to Roth. The final IRS regulations formally apply in 2027, and plans are expected to follow the rule in good faith during 2026.

Moves before December 31

1. Check your last pay stub of the year to confirm catch-up dollars are going to Roth if you are over the line, and pre-tax if you are not.
2. Use the 60 to 63 window. If you turn 60, 61, 62 or 63 this year, the $11,250 super catch-up is the biggest 401(k) amount you will ever be allowed.
3. Budget for the tax on Roth catch-ups through withholding or a fourth-quarter estimate, so April is not a surprise.
4. Look at your 2026 wages now. If they will cross $150,000, your 2027 catch-up will be Roth too.
5. Fund an IRA as well. The $7,500 IRA limit (plus $1,100 at 50 or older) is separate from your 401(k).

Plan your contributions with us

London's Tax Services helps employees, executives and business owners across Westchester County, the Bronx and New York City plan retirement contributions, S corp salaries and year-end withholding, from our office at 75 South Broadway in White Plains. Our tax planning guide for high earners covers the rest. Book a free 15-minute call or call (646) 917-7714 before your last paycheck of the year.