Higher Earners Over 50 Lost a 401(k) Tax Break in 2026 — Here’s What Changed

Workers age 50 and older can generally contribute an extra $8,000 to a 401(k) in 2026, but eligible higher earners must make those catch-up contributions as Roth contributions. Employees who turn 60 through 63 may qualify for an $11,250 catch-up limit – Shutterstock

Higher earners over 50 face a new 401(k) rule in 2026, and it changes when they pay income taxes on some retirement contributions. Workers whose previous-year wages from their current plan sponsor exceeded $150,000 must generally make their eligible catch-up contributions on a Roth basis. That means they lose the option to deduct those extra contributions from current taxable income.

The change doesn’t eliminate catch-up contributions or prevent higher earners from saving more. Instead, it changes the tax treatment of the extra money they contribute after reaching the regular 401(k) limit. The rule comes from the SECURE 2.0 Act, and it now affects eligible workers making contributions in 2026.