Overview

• Workers aged 50 and over with prior-year wages above $145,000 will have to make 401(k) catch-up contributions on a Roth basis, with the income threshold indexed to inflation.
• Plans may adopt the change in 2026 using a reasonable, good-faith interpretation, and full compliance becomes mandatory in 2027.
• High earners in plans without a Roth 401(k) feature may be unable to make any catch-up contributions under the new rules.
• Roth treatment shifts taxes to the contribution year, potentially increasing current tax bills and pushing some savers into higher brackets, while qualified withdrawals in retirement are tax-free.
• For 2025, catch-up limits are $7,500 for those 50+ and $11,250 for ages 60–63, with inflation adjustments expected as more plans add Roth options in response.