Understanding the 2026 Changes to 401(k) Catch-Up Contributions

Key changes to 401(k) catch-up contributions are on the horizon. Starting in 2026, updates from the SECURE 2.0 Act will affect how and when older workers, particularly high earners and those in their early 60s, can make additional contributions toward retirement.

Catch-Up Contributions: The Basics

Catch-up contributions allow individuals age 50 or older to exceed the standard 401(k) limit. In 2025:

• The standard 401(k) limit is $23,500
• The catch-up amount is $7,500
• Total contribution limit for eligible workers: $31,000

What’s Changing in 2026?

High earners (income over $150,000 in 2025) will be required to make catch-up contributions to a Roth 401(k)—using after-tax dollars instead of pre-tax.

• This eliminates the upfront tax deduction many workers are used to
• But it allows for tax-free growth and withdrawals in retirement

If a Roth 401(k) option is not available, these employees will be prohibited from making any catch-up contributions, unless the plan is updated.

A New “Super” Catch-Up Provision for Ages 60 to 63

A separate provision introduces an enhanced opportunity for late-career savers. Starting in 2026:

• Workers ages 60 to 63 may contribute the greater of $10,000 or 150% of the standard catch-up amount
• This “super” catch-up is also Roth-only for high earners

Who’s Eligible?

Eligibility is based on your age as of December 31 of the tax year.

• You qualify for regular catch-up in the year you turn 50
• You qualify for super catch-up between ages 60 and 63

Even if your birthday is late in the year, you’re eligible for the full additional contribution.

Planning Considerations

While Roth contributions reduce short-term tax benefits, they may offer better retirement flexibility, including:

• No required minimum distributions (RMDs)
• Reduced exposure to taxes on Social Security or Medicare surcharges
• Tax-free income in retirement, which can support lifetime income planning

For high earners, this is also an opportunity to evaluate whether Roth vs. traditional 401(k) contributions are better aligned with your long-term tax outlook.

Employers should ensure their plans support Roth catch-up contributions and begin communicating these changes well ahead of 2026.

How LMC Can Help

As retirement plan rules evolve, proactive planning becomes even more important. At LMC, we work closely with individuals and businesses to help them make informed decisions about retirement contributions, tax planning, and long-term strategy.

If you have questions about how these updates may affect your retirement plan or your workforce, reach out to your LMC advisor for guidance tailored to your needs.