What You Need to Know About Roth-Required 401(k) Catch-Up Contributions Starting in 2026
- Christian West
- Dec 5
- 5 min read
Retirement savers age 50 and older have long relied on catch-up contributions to boost savings as they approach retirement. These additional contributions provide a meaningful opportunity to save more—especially for high earners in their peak earning years.
The One Big Beautiful Bill Act (OBBBA) introduced several important updates to retirement plans, including a clarification and reset of the rule requiring certain catch-up contributions to be made as Roth. This update takes effect in 2026, and it’s important for high-income earners, business owners, and employees to understand what’s changing and how to prepare.
Below, we break down what the new law means, who is affected, and how you can use the transition year ahead to optimize your tax and savings strategy.
What’s Changing Under OBBBA?
Beginning January 1, 2026, catch-up contributions for certain workers will be required to go into a Roth 401(k), 403(b), or governmental 457(b) account.
This rule applies only to catch-up contributions, not to regular salary deferrals.
Who Is Required to Make Roth Catch-Up Contributions?
If your prior-year wages from the employer sponsoring the plan exceed $145,000 (indexed annually), your catch-up contributions must be Roth. Wages include only FICA-taxable compensation from that specific employer. The rule applies to you if your wages in the previous year exceeded $145,000 (this number is indexed for inflation, so for 2026 enforcement, the threshold will likely be $150,000 or higher based on your 2025 wages).
If your prior-year wages are $145,000 or below, you may continue choosing between pre-tax or Roth catch-ups.
This rule applies to all workers age 50+ making catch-up contributions, including those taking advantage of the enhanced “super catch-up” provision for ages 60–63 (also effective 2026). The "Super Catch-Up" (for ages 60–63) is subject to the exact same mandatory Roth rules as the standard catch-up
Why the Change?
Congress and the Treasury Department have moved toward increasing access and usage of Roth accounts. Roth contributions are made with after-tax dollars, which increases current-year tax revenue while helping retirement savers build tax-free income later in life.
OBBBA clarified earlier SECURE Act 2.0 language and implemented a firm start date after industry concerns about operational readiness. The result: a cleaner transition and a clear target date for plan sponsors and payroll systems.
What If Your Employer Doesn’t Offer a Roth 401(k)?
Before OBBBA, this created uncertainty—if a plan didn’t offer Roth, high earners technically couldn’t make catch-up contributions at all.
OBBBA resolved this. Employers must add Roth functionality by 2026 so high earners can comply with the new rule. Plans without a Roth option will need to update their documents and payroll systems accordingly.
What Stays the Same?
Despite these changes, several key rules remain unchanged:
You can still contribute regular salary deferrals as pre-tax or Roth (your choice).
Catch-up limits remain available for those age 50+.
Starting in 2026, workers ages 60–63 receive a larger catch-up limit—either $10,000 or 150% of the standard catch-up, whichever is greater.
Only the tax treatment of catch-up dollars is shifting for high-income earners.
Example: How This Plays Out
Case Study: An individual earns $180,000 in wages from her employer in 2025 and turns 52 that year.
In 2025, she may still decide whether her $7,500 catch-up is pre-tax or Roth.
Beginning in 2026, all catch-up contributions will be Roth because her 2025 wages exceed $145,000.
Her regular $23,500 contribution (2025 limit) can still be pre-tax if she prefers.
For workers using catch-ups as a tax-reduction tool, this creates a new strategic consideration.
Planning Opportunities for 2025 and Beyond
The shift to Roth for high earners presents several planning opportunities—especially for individuals managing taxable income, business owners with variable wages, and those coordinating Roth conversions or charitable giving.
1. 2025 Is the Final Year for Pre-Tax Catch-Up Contributions for High Earners
If reducing taxable income is a priority this year, the pre-tax catch-up remains a valuable tool.
2. Expect Higher Taxable Income Beginning in 2026
Required Roth catch-ups may increase current-year tax liability for high-income earners. Adjust estimated payments and tax projections accordingly.
3. Business Owners Can Strategically Manage W-2 Income
Because the rule applies only to prior-year wages, adjusting compensation or entity structure may influence whether catch-ups must be Roth.
4. Consider Coordination With Roth Conversions
More forced Roth contributions may change the optimal timing or size of Roth conversions.
5. Review Overall Retirement Income Strategy
Roth savings can be an advantage in retirement—creating tax-free income and lowering future RMDs. The new rule may be beneficial long-term, even if the tax bill rises in the short term.
How Rigden Capital Strategies Helps Clients Prepare
At Rigden Capital Strategies, we help clients evaluate the impact of these changes through coordinated tax and retirement planning. For many of our clients nearing retirement, catch-up contributions are an essential component of their wealth plan, and shifting those dollars to Roth requires thoughtful strategy.
We work with you to analyze income levels, review contribution strategies, model the tax impact, and determine how pre-tax versus Roth fits into your long-term plan—especially with the new rules arriving in 2026.
Final Thoughts
The OBBBA update creates a meaningful shift in how high earners make catch-up contributions, but with thoughtful planning, it can also be an opportunity to strengthen future tax-free retirement income.
If you’d like to review how this change affects you, your business, or your retirement plan, we’re here to help. You can connect with us anytime to start the conversation.
About Rigden Capital Strategies
Rigden Capital Strategies was founded on a simple belief: financial advice should be personal, transparent, and centered around your goals—not built on generic models or product-driven sales. With decades of combined industry experience, we’ve developed a process grounded in three core values: value, integrity, and progress.
As a fee-only fiduciary, we provide personalized, goals-based wealth planning services designed to adapt with your life. Our services include investment management, retirement and tax planning, and estate coordination. We use a mix of active and passive strategies to help clients navigate market changes with clarity and confidence.
We believe in building real relationships and delivering clear, actionable strategies—focused on long-term planning and aligned with your objectives.
Your goals, our strategies. Together, let’s make your goals happen.
Disclosure: This content is for informational and educational purposes only and should not be interpreted as financial, legal, or tax advice. While we strive for accuracy, we do not guarantee the completeness or reliability of the information provided. Investment decisions should be based on individual circumstances, and we recommend consulting a qualified professional before implementing any financial, legal, or tax strategies. Past performance is not indicative of future results, and all investments carry risks, including potential loss of principal. No investment strategy can guarantee success or protect against loss in all market conditions. Investors should carefully consider their risk tolerance, investment objectives, and financial circumstances before making investment decisions.
