If you’re 50 or older and have a 401(k), 403(b), governmental 457(b), or similar retirement plan, 2026 is shaping up to be a great year to boost your savings. Thanks to the SECURE 2.0 Act of 2022 (“SECURE 2.0”), you now have even more room to contribute to your retirement accounts due to certain changes to the catch-up contribution rules.
2026 Elective Deferral Limit
The annual limit on employee elective deferrals (pre-tax, Roth, or a combination) to a retirement plan in 2026 is $24,500 (increased from $23,500 in 2025). This limit applies to all participants regardless of age.
Catch-Up Contributions
If you will be 50 years of age or older by December 31, 2026, your retirement plan may let you contribute extra “catch-up” dollars beyond the $24,500 standard elective deferral limit. If your retirement plan permits catch-up contributions, you will be able to contribute an additional $8,000 to your retirement plan account via a catch-up contribution in 2026. As a result, you will be able to defer up to $32,500 (the $24,500 elective deferral amount, plus the $8,000 catch-up contribution) to your retirement plan account this year, if permitted by the terms of your retirement plan.
Key Changes under SECURE 2.0:
- Super Catch-Up Contributions. Beginning in 2025, SECURE 2.0 introduced “super” catch-up contributions for retirement plan participants who turn 60, 61, 62, or 63 during the calendar year. Rather than limiting your catch-up contribution to $8,000, the super catch-up contributions allow retirement plan participants to defer up to $11,250 instead if you will be turning 60, 61, 62, or 63 in 2026. This effectively allows you to contribute a total of $35,750 (the $24,500 elective deferral amount, plus the $11,250 super catch-up contribution) to your retirement plan account, if permitted by the terms of your retirement plan.
- Mandatory Roth Catch-Up for High Earners. Starting in 2026, if you are 50 years of age or older and your 2025 FICA wages (Box 3 on your W-2) exceeded $150,000, all of your catch-up contributions must be made on a Roth basis (i.e., your catch-up contributions, including your super catch-up contributions, will be made on an after-tax basis). While you will lose the immediate tax deduction, you will gain fully tax-free growth and distributions for you and your beneficiaries with respect to the amounts deposited into your retirement account as Roth catch-up contributions – a win for legacy planning.
On the other hand, if your 2025 wages were $150,000 or less, you can still choose whether to make your catch-up contributions on a pre-tax or Roth basis. This determination will be made each year based on your wages paid in the prior year.
What Should You Do Now?
- Check your age eligibility – will you turn 50 years old by the end of the year? If so, you will be eligible to make catch-up contributions. On the other hand, if you turn 60, 61, 62, or 63 this year, you will be eligible to make super catch-up contributions this year.
- Pull your 2025 W-2 now – look at Box 3 (FICA wages). If this Box displays an amount over $150,000 and you are 50 years of age or older by year-end, any catch-up contributions made in 2026 must be made on a Roth basis (i.e., after-tax).
- Contact payroll or HR – update your contribution elections accordingly. You may also ask them to confirm:
- If your retirement plan allows Roth contributions?
- Is the super catch-up contribution option available?
- Think ahead on estate planning – Roth catch-up dollars create tax-free growth that passes entirely tax-free to your heirs and beneficiaries. Consider rolling eligible 401(k) balances into a Roth IRA after you separate from service (or via in-plan options if available) to eliminate lifetime required minimum distributions and keep the account growing longer for your family.
Questions about your specific plan or how this fits your overall wealth and legacy goals should be discussed with your counsel and financial advisor.
For additional information, please contact an attorney in Gunster’s Private Wealth Services or Tax Practice group.
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