Overview
- Affected participants are age 50 and older who earned more than $145,000 in prior-year FICA wages from their current employer.
- Catch-up dollars for these workers must go into a Roth account, shifting taxes to now while future qualified withdrawals are tax-free.
- If a plan does not offer a Roth feature, eligible high earners will be unable to make catch-up contributions unless the employer updates the plan.
- Most plans already have Roth capability, with about 93% offering Roth contributions according to Plan Sponsor Council of America data.
- Standard limits are rising, with the 401(k) deferral cap moving to $24,500 in 2026 and the catch-up limit increasing to $8,000.