401k Catch-up contribution changes for 2026

[woodreau]

Treasury just released changes to SECURE 2.0

One of the changes now requires Catch-up Contributions for taxpayers over 50 to be Roth contributions instead of Traditional 401k contributions if you made more than $145k in the previous year.

If you had been making catch up contributions to reduce your AGI, they’ll no longer reduce your AGI.

If your 401k plan administrator doesn’t allow Roth 401k contributions, this means you won’t be able to make a Catch-Up contribution to your 401k in 2026.

however employers have until 2027 to implement these changes to their 401k plans.

 

[bp]

so is this is a carve out in the roth contribution income cap, or is the catchup contribution not going to be available at all to earners above the threshold?

 

[woodreau]

The Roth contribution income cap is for Roth IRAs and deductible IRA contributions

There is no income cap for Roth 401k contributions.

If your are over 50 and want to make the catch-up contribution to your 401k for 2026 it has to be a Roth 401k contribution. You won’t be able to salary defer the catch-up contribution by making it a traditional 401k catch-up contribution.

That’s all…. And it only applies if your prior year AGi is greater than $145k which most major airline pilots (except first year) can easily make.

It doesn’t change the $1000 catch up to a Roth IRA (if you can make one - most major airline pilots cannot make a Roth IRA contribution and have to make the nondeductible traditional IRA contribution followed by a Roth conversion assuming you have no other traditional IRA assets)

It would suck if it also applied to IRA catchups because that would eliminate the backdoor Roth option for the IRA catchups.