New 2026 Catch Up Contribution Rule: What You Need to Know

Standard and Catch‑Up Limits

• The base 401(k), 403(b), and similar plan contribution limit will increase to $24,500 in 2026.

• Eligible participants aged 50 and older may contribute an additional $8,000 in catch‑up contributions, for a total employee contribution of $32,500.

Super Catch‑Up for Ages 60–63

• Plan participants aged 60 to 63, where allowed, can use a “super” catch‑up of $11,250 in 2026—bringing the total possible contribution to $35,750.

Roth‑Only Catch‑Up for Higher Earners

• Starting January 1, 2026, individuals aged 50+ with prior-year earnings over $145,000 must make their catch‑up contributions as Roth (after‑tax), rather than pre‑tax.

• If your plan does not offer a Roth option, you cannot make catch‑up contributions.

Why It Matters

• Immediate tax hit: Catch‑up contributions are taxed now, reducing your take-home pay.

• Long‑term gain: Roth contributions grow tax‑free, and withdrawals in retirement are also tax-free.

Action Items

• Confirm whether your employer-sponsored plan includes a Roth option.

• Assess your 2025 income to determine if you’ll be subject to the Roth-only rule in 2026.

• Review your retirement savings strategy with a financial advisor to account for changes in tax planning and cash flow.