Understanding the 2026 Mandatory Roth Catch-Up Contributions
December 29, 2025
Written by: Brian McKinney, CFP®
If you are 50 or older and saving for retirement starting in 2026, a significant change is coming to workplace retirement plans. The SECURE Act 2.0 introduces mandatory Roth “Catch-Up” contributions for certain high earners, and this rule will have important implications for how you save for retirement, impact your taxes, and affect your long-term financial strategy. Understanding these changes now can help you stay ahead and make smarter decisions for your future.
What Is the Mandatory Roth “Catch-Up”?
Currently, employees aged 50 or older can make additional contributions to their retirement plan. This is known as a catch-up contribution, which allows individuals to save more as they approach retirement.
Starting in 2026, employees aged 50 or older who earn more than $150,000 in Social Security covered wages from the employer sponsoring their plan will be required to make their catch-up contributions as Roth contributions instead of having the option for pre-tax contributions. This income threshold is indexed annually for inflation.
While Roth contributions do not reduce your taxable income, like pre-tax contributions, the advantage of Roth contributions is that these dollars grow tax-free and can be withdrawn tax-free in retirement as long as Roth rules are met. In other words, you pay the taxes now instead of later.
Who Does This Apply To?
This rule applies to employees 50 or older who make catch-up contributions and have earned more than $150,000 in prior-year wages, subject to Social Security tax from their employer. If your income is below the threshold, you can still choose whether your catch-up contributions are pre-tax or Roth.
If your employer’s plan does not offer Roth contributions, then those earning above $150,000 will not be allowed to make any catch-up contributions.
How Much Can You Contribute?
The annual contribution limit for employer plans in 2026 is $24,500.
The standard catch-up contribution limit for workers age 50 and above is $8,000 for 2026, and is adjusted for inflation.
In 2026, individuals aged 60 to 63 are eligible for an additional $3,250 catch-up contribution above the standard catch-up contribution. This means that those aged 60 to 63 can contribute an additional $11,250 to their employer plans in 2026, instead of the standard $8,000 for those aged 50 and above.
It is important to note that this enhanced limit only applies if the employer’s plan adopts it.
Beginning in 2026, those enhanced contributions for high earners will also be required to be Roth.
How This Affects Your Retirement Strategy
The shift to Roth-only catch-ups can change your retirement planning in several ways.
You may need to adjust your tax strategy, since catch-up contributions will no longer reduce your taxable income in the year they’re made. If you have relied on pre-tax catch-up contributions to reduce your taxable income, that option may no longer be available. This could affect your tax bill during your peak earning years.
Having more Roth dollars can offer long-term advantages. Even though you forgo the immediate tax deduction, Roth contributions provide tax-free growth and tax-free withdrawals in retirement. This can offer greater flexibility later in life and can also be beneficial for legacy goals.
Budgeting may need to be revisited. A required shift to Roth means that contributions will no longer reduce taxable income in the current year, which could reduce your take-home pay. Planning ahead can help avoid surprises.
What Should You Do Now?
It is helpful to evaluate your current tax bracket and expected retirement income. If you expect to be in a similar or higher tax bracket in retirement, the Roth requirement may work in your favor.
Consider adjusting your savings schedule starting in 2026 and be mindful of these new rules. Monitor contributions throughout the year and plan ahead for bonuses or lump sums to avoid surprises.
Spread contributions evenly to maintain steady cash flow and avoid unexpected paycheck changes, since Roth contributions are made after-tax.
Confirm with your employer or plan administrator that their retirement plan is prepared to process Roth catch-up contributions, as some plans are still updating their systems.
Plans may adopt a “deemed Roth election” strategy, which automatically treats catch-up contributions as Roth for employees unless they opt out. If pre-tax contributions are made by error in this case, they can be corrected by the end of the following contribution year via W-2 adjustments or in-plan Roth rollovers.
Final Thoughts
The new Mandatory Roth Catch-Up rule is a significant retirement savings change that certain employees need to adjust to. While it removes some flexibility by requiring certain catch-up contributions to be made on an after-tax Roth basis, it can create valuable opportunities.
This change encourages a balanced approach to retirement savings, allowing you to build a more tax-efficient income strategy that can improve your financial security and flexibility in retirement. With careful planning, you can use the Mandatory Roth Catch-Up to your advantage and better manage how taxes impact your savings.
Williams Asset Management is located at 8850 Columbia 100 Parkway, Suite 204, Columbia, MD 21045. For additional information about the services of Williams Asset Management, please call (410) 740-0220. Advisory services offered through Commonwealth Financial Network®, a Registered Investment Adviser. Williams Asset Management and Commonwealth Financial Network® do not provide legal or tax advice. This material has been provided for general informational purposes only and does not constitute either investment or tax advice. Although we go to great lengths to make sure our information is accurate and useful, we recommend you consult a financial advisor or tax preparer.
