The 2026 Roth Catch-Up Rule: What High Earners Need to Know

A SECURE 2.0 Act provision that takes effect in 2026 changes how higher-paid workers make catch-up contributions to their 401(k). If you are age 50 or older and a high earner, the extra “catch-up” money you put in now has to go in as Roth—after-tax—rather than pre-tax. For the many Douglas County residents who commute to the Denver Tech Center or hold executive roles, this is a real, this-year change worth understanding.

The Rule in Plain English

Workers age 50 and older can contribute an extra amount to their 401(k) each year beyond the standard limit—this is the “catch-up” contribution (an additional $7,500 in 2025, indexed for inflation). Historically you could make that catch-up on a pre-tax basis and deduct it.

Starting in 2026, if you earned more than $150,000 in FICA wages from your employer in the prior year, your catch-up contributions must be made as Roth (after-tax) dollars. You no longer get the up-front deduction on that portion. The $150,000 figure is the 2026 threshold and is indexed for inflation going forward. Workers under that wage threshold can still choose pre-tax or Roth.

Why This Matters for Douglas County Professionals

Lone Tree, Highlands Ranch, Parker, and Castle Rock are home to a large number of executives, physicians, and tech professionals whose wages clear the $150,000 line. If that is you, and you are 50 or older, three things follow:

• Your catch-up loses its deduction. Budget for a slightly higher current-year tax bill on the catch-up portion, since it is now after-tax.
• Your plan must offer a Roth option. If your 401(k) does not have a Roth feature, you may temporarily be unable to make catch-up contributions at all—worth confirming with your HR or plan administrator.
• Your future tax picture shifts. More of your savings will be Roth, which changes your retirement withdrawal and tax strategy.

The Enhanced Catch-Up for Ages 60–63

Separately, SECURE 2.0 created a larger “super catch-up” for savers ages 60 to 63, allowing a higher catch-up amount than the standard figure during those years. If you are in that age band and a high earner, both rules interact: a bigger catch-up that also must be Roth. Confirm the current-year dollar amounts with your plan or advisor.

Is This Actually Bad News?

Not necessarily. Losing a deduction stings, but Roth savings grow tax-free, come out tax-free in retirement, and are not subject to required minimum distributions during your lifetime. For high earners who expect meaningful taxable income in retirement—pensions, large IRA balances, real estate—building more Roth can be genuinely valuable. The mistake is being caught off guard by it, not the rule itself.

What to Do This Year

• Confirm whether your prior-year FICA wages exceeded $150,000.
• Check that your 401(k) offers a Roth option, and update your election if needed.
• Revisit your overall pre-tax vs. Roth mix as part of a broader tax plan.
• If you have concentrated stock compensation on top of this, coordinate the two—see our stock compensation guide.

A fiduciary advisor can model whether leaning further into Roth helps or hurts your specific situation. If you want a second set of eyes, connect with a Castle Rock wealth management advisor or a planner in your area.

This guide is general educational information, not tax advice. Contribution limits and thresholds are set annually by the IRS; confirm current figures and how the rule applies to your plan with a qualified tax professional. Source: SECURE 2.0 Act and IRS guidance.