Retirement rules are constantly changing. Under the SECURE 2.0 Act of 2022, several important updates are taking effect this year. This includes new rules for 401(k) catch-up contributions.

Will these changes impact your retirement? Join Heath Grossman, CFP® in this week’s Money Wisdom Question Series as he breaks down the latest numbers.

What is a Catch-Up Contribution?

Retirement accounts like 401(k)s and 403(b)s have limits on how much you can contribute each year. Your age determines some limits, including the limits for “catch-up” contributions. Typically, in the year you turn 50 is when you can contribute this additional amount beyond the standard limit.

What Are the New Rules?

Historically, individuals have been able to direct both their regular contributions and catch-up contributions however they choose. Depending on what your plan allows, you can either use pre-tax contributions or Roth contributions.

But as of 2026, that flexibility is changing in a major way. Now employees aged 50 and older who earn over $150,000 a year (indexed for inflation) must make catch-up contributions to a Roth account. Meaning, you won’t receive a tax deduction and will pay taxes on that portion of your income now.

What Are the Current Contribution Limits?

For 2026, individuals under age 50 can contribute up to $24,500 per year to a 401(k) plan. If you’re 50 or older, you can make an additional $8,000 catch-up contribution. In the years you turn 60, 61, 62, or 63, you can contribute up to $11,250 thanks to a special provision known as a “super catch-up”.

What Are the Next Steps?

The first, most crucial step is to confirm whether your employer’s plan offers a Roth 401(k) option. If your plan does not allow Roth contributions, you may not be able to make any age 50+ catch-up contributions at all.

If you find yourself in this situation, consider contributing to other tax-advantaged accounts as an alternative. A financial advisor can help assess how these updates fit into your long-term retirement strategy.