Secure 2.0: 2026 401k Catch Up Rule Will Surprise High Earners

If you’ve been following the rollout of Secure 2.0, you already know that many of its rules were designed to phase in gradually. But one change hitting in 2026 is turning out to be far more disruptive than expected, especially for business owners, payroll teams, and anyone planning to make 401(k) catch-up contributions.

This update is flying under the radar, yet it has the power to reshape how people save for retirement and how company plans must operate. And based on conversations across the industry… a lot of folks are just now realizing what’s coming.

Let’s walk through the key points in plain English and talk about what needs attention before 2026 arrives.

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What the 2026 Roth-Only Catch-Up Requirement Really Means

The change is simple of the surface. Beginning January 1, 2026, if you earn $145,000 or more (based on the prior year’s wages), any 401(k) catch-up contributions you make must go into the Roth side of the plan.

In other words:

• No more traditional, pre-tax catch-up contributions for higher-income earners.
• Catch-up contributions are still allowed, just not on a pre-tax basis.

This single change touches multiple groups:

• Individuals turning 50 or older
• Employers sponsoring retirement plans
• Payroll teams responsible for coding contributions correctly

Even seasoned retirement pros admit this one sneaked up on them. So if it wasn’t on your radar, you’re not alone.

Why the $145,000 Threshold Matters

The $145,000 figure is the dividing line between who can choose pre-tax catch-ups and who must switch to Roth.

Here’s how it works:

• Once you hit age 50, you’re eligible to contribute an extra $7,500 as a catch-up.
• But if last year’s income was $145k or higher, that extra $7,500 must be Roth.

The idea seems to be that higher earners are more likely to take advantage of catch-ups, and lawmakers want those dollars taxed now rather than later. In other words, it’s a revenue-friendly nudge toward Roth savings.

For many people, this rule will change not only how they contribute, but also how they think about tax planning in the years leading up to retirement.

The New "Super" Catch-Up at Ages 60-63

Another lesser-known twist arrives for those between ages 60 and 63. During that four-year window, your catch-up limit jumps significantly to $11,250 (based on current numbers). The rule is a bit quirky (age 64 isn’t included) but the intent seems clear: give people nearing retirement an extra opportunity to boost savings.

And yes, if you’re in that income-above-$145k category, these extra contributions also must be Roth.

Why Many Company Plans Aren't Set Up for This Yet

Here’s where things get complicated.

Plenty of retirement plans still don’t offer a Roth option. Under the new rules, that’s no longer just a minor inconvenience. It could block employees from making catch-up contributions altogether. That’s a major issue not just for employees, but also for employers trying to stay compliant.

If a plan doesn’t offer Roth:

• Higher-income employees cannot make catch-up contributions starting in 2026
• Employers may find themselves unintentionally out of compliance
• Payroll teams won’t have the correct framework to code contributions

What Employers, Payroll Teams, and Individuals Should Do Now

With 2026 coming fast, the to-do list starts with coordination. The best approach is coordinated preparation. Here’s where to start:

For Employers

• Contact your retirement plan provider and confirm whether your plan currently includes a Roth option.
• If it doesn’t, discuss the timeline and steps to add one.
• Communicate early with employees about how the upcoming rule may affect their contributions.

For Payroll Teams

• Verify your system can identify employees who exceed the $145k threshold.
• Update contribution codes so catch-ups route to Roth for those employees automatically.
• Work closely with plan administrators to keep records clean.

For Individuals

• Look at your prior-year income to determine whether this rule will apply to you.
• Revisit your savings strategy, especially if you were planning on pre-tax catch-ups.
• If you’re approaching 60, take note of the expanded “super” catch-up window.

Why You Don't Want to Put This Off

Some regulatory updates can wait. This one really can’t.

Plans need time to adopt amendments, update payroll systems, retrain teams, and notify employees. And with so many moving parts, waiting will likely lead to headaches.

The smoother things are running well before 2026, the better off business owners, payroll teams, and savers alike will be.