Will the 2026 Roth-only catch-up rule affect you or your spouse?
First, What Is a Catch-Up Contribution?
Once you turn 50, the IRS allows you to contribute extra money to your 401(k) beyond the standard annual limit.
For example, in recent years:
There’s a base 401(k) contribution limit
Plus an additional “catch-up” amount for workers age 50+
The purpose is to help older workers accelerate savings before retirement.
These rules are overseen by the Internal Revenue Service.
What Changed in 2026?
Beginning in 2026, employees who earn more than a certain income threshold must make their catch-up contributions on a Roth (after-tax) basis only.
In simple terms:
If your prior-year wages from that employer exceed $145,000 (indexed for inflation), your catch-up contributions can no longer be made pre-tax. They must go into a Roth account.
This rule was created under the SECURE 2.0 Act and is detailed by the Internal Revenue Service and retirement plan guidance from the U.S. Department of the Treasury.
What Does “Roth-Only” Actually Mean?
Pre-tax (Traditional 401(k)):
Reduces your taxable income today
You pay taxes later when withdrawing
Roth 401(k):
Contributions are made after taxes
Qualified withdrawals in retirement are tax-free
So under the new rule, high earners can still contribute catch-up funds — but they lose the immediate tax deduction on that portion.
Who Does This Affect?
This rule affects you if:
You are age 50 or older
You participate in a 401(k) or similar employer plan
Your wages from that employer exceed $145,000 (adjusted annually)
If you earn below that threshold, nothing changes — you may still choose traditional or Roth catch-up contributions.
If your spouse earns above that threshold and contributes to a 401(k), it may affect them even if you personally do not.
Why Did Congress Make This Change?
The main reason is tax timing.
Requiring higher earners to use Roth catch-up contributions increases tax revenue now (since taxes are paid upfront), which helps offset other retirement-related provisions.
It does not eliminate catch-up contributions. It changes their tax treatment.
Will This Hurt High Earners?
It depends.
Potential Downsides:
• Higher current taxable income
• Less immediate tax relief
• Possible impact on Medicare premium brackets (IRMAA) if income rises
Medicare premium income thresholds are overseen by the Centers for Medicare & Medicaid Services.
Potential Upsides:
• Tax-free withdrawals in retirement
• No required minimum distributions (RMDs) on Roth 401(k)s starting in 2024 changes under SECURE 2.0
• Diversified tax strategy (some taxable, some tax-free income later)
For some high earners who expect future tax rates to rise, Roth contributions may actually be beneficial.
What About Spouses?
If both spouses are working and over 50:
Each person’s catch-up rule is based on their individual wages.
One spouse may qualify for traditional catch-up.
The other may be required to use Roth-only.
This makes coordinated tax planning more important.
What If Your Employer Doesn’t Offer Roth?
Plans must allow Roth contributions if high earners are making catch-up contributions.
If your employer does not offer Roth, they may need to update their plan to stay compliant.
This is an administrative issue for the employer, not something you need to solve alone.
The 2026 rule does not remove your ability to contribute more after age 50, It changes how those contributions are taxed if you are a higher earner.
For some couples, this may slightly increase current taxes. For others, it may strengthen long-term tax flexibility.
The key isn’t reacting emotionally, It’s reviewing your plan deliberately.
If you or your spouse are still earning over $145,000 and using catch-up contributions, this change deserves a conversation with a tax professional or financial planner.
Structure beats surprise.
With care,
Mike Bridges
Founder, The O55 Report