Mandatory Roth catch-up contributions in 2026: the $150,000 wage rule

If you're 50 or older and contribute "catch-up" money to a 401(k), 403(b) or governmental 457(b), 2026 changes how some of that money is taxed — not how much you can contribute, but whether it can still be pre-tax. This is the rule behind the open-enrollment paperwork and payroll notices landing this fall, so it's worth understanding before you set your 2027 elections. This is general information, not tax or legal advice; your plan administrator's notice is the final word for your specific plan.

The rule in one paragraph

Starting with the 2026 tax year, if you're 50 or older and your prior-year FICA wages from the employer sponsoring the plan (the Social Security-taxed wages in Box 3 of your W-2, not your total income or wages from other jobs) exceeded $150,000, every catch-up contribution you make to that employer's 401(k), 403(b) or governmental 457(b) in 2026 must go in as Roth (after-tax), not pre-tax. If you're under that wage line, your catch-up can still be pre-tax or Roth, whichever your plan allows and you prefer. This comes from Section 603 of the SECURE 2.0 Act of 2022, codified at IRC §414(v)(7), and only affects the catch-up portion of your contributions — the regular 2026 elective deferral limit, $24,500, is unaffected and can still be contributed pre-tax by anyone, at any wage level.

The wage threshold: $150,000 for 2026, and it moves every year

The statute set the original threshold at $145,000, indexed for inflation each year the same way as other retirement limits (IRC §415(d)), rounded down to the next $5,000. The IRS set the first indexed figure, for 2025, at $145,000; Notice 2025-67 set the 2026 figure at $150,000. That 2026 amount, $150,000, is the number that matters for 2026 catch-up contributions, even though the wages being measured are from 2025 — the threshold used is the one for the year the catch-up contribution is made, not the year the wages were earned.

Two things trip people up here. First, it's wages from that specific employer, not your combined income across jobs — someone who earned $180,000 at Employer A in 2025 and starts a new job at Employer B in 2026 isn't automatically Roth-mandated at Employer B, because Employer B has no 2025 FICA wages for them at all (or very little, if they started partway through 2025). Second, it's FICA (Social Security) wages specifically — generally your gross pay before 401(k)/403(b) deferrals but after certain pre-tax items are excluded, and it's capped each year at the Social Security wage base for the OASDI portion, though the measure used for this rule is uncapped Medicare-taxed wages under the statute's definition. Your W-2 Box 3 figure is the practical starting point; ask your payroll department if you're near the line.

Which plans are covered — and which aren't

• Covered: 401(k) plans, 403(b) plans, and governmental 457(b) plans (not the nongovernmental/tax-exempt-employer kind).
• Not covered: SIMPLE IRAs are exempt from this rule entirely — their catch-up contributions can stay pre-tax regardless of wages. SIMPLE 401(k) plans are a genuinely unsettled edge case: they're rare, and published guidance hasn't squarely addressed whether they're treated like other 401(k)s for this purpose. If you're in a SIMPLE 401(k) and near the wage threshold, ask your plan's recordkeeper directly rather than assuming either answer.

The 2026 catch-up limits themselves

The wage rule decides how your catch-up is taxed, not how much you can contribute. The limits themselves, also from Notice 2025-67:

The enhanced catch-up only applies in the calendar year you turn 60, 61, 62 or 63; it's optional for plans to offer, and some haven't added it. If your plan doesn't offer the enhanced amount, the regular $8,000 catch-up is what's available instead.

If your plan doesn't offer a Roth option

This is the part catching people off guard. The law doesn't require any plan to add a Roth contribution feature. But under the final IRS regulations, if you're wage-mandated into Roth catch-up and your plan has no Roth feature at all, you simply cannot make any catch-up contribution in 2026 — not "it stays pre-tax by default," but unavailable. Your base $24,500 pre-tax limit is untouched; you just lose access to the extra $8,000 or $11,250 until your plan adds Roth, or until a plan year where your wages fall back under the threshold.

If this applies to you, ask your HR or benefits team two things now, during open enrollment: whether the plan already has, or is adding, a Roth 401(k)/403(b) feature for 2026, and whether your plan intends to apply a "deemed Roth" election (some plans will auto-treat a mandated participant's catch-up elections as Roth without asking) or require an active election. Plans aren't required to add Roth, but many recordkeepers are rolling it out specifically because of this rule — it's worth confirming rather than assuming your plan already has it.

Worked examples

Example 1 — mandated, same employer, both years. Dana is 55, FICA wages from her employer were $162,000 in 2025, and she wants to contribute the full $8,000 catch-up in 2026. Since $162,000 exceeds the $150,000 threshold, all $8,000 must be Roth — she can't choose pre-tax for any of it, even though her base $24,500 can still be pre-tax. At a 24% marginal tax rate, that $8,000 now costs her $8,000 of take-home pay over the year instead of $6,080 (what the same contribution would have cost if it could be pre-tax); the other $1,920 is tax she's paying now instead of in retirement. In exchange, that $8,000 and everything it earns is never taxed again.

Example 2 — under the line, enhanced catch-up available. Marcus turns 61 in 2026. His FICA wages from his employer were $138,000 in 2025 — under $150,000 — so his catch-up can stay pre-tax if he prefers, and because he's 60-63, his limit is the enhanced $11,250, not $8,000 (if his plan offers it).

Example 3 — the employer-switch nuance. Priya is 52. She earned $210,000 in FICA wages at her old employer in 2025, but left in March 2026 for a new job; her 2025 wages from the new employer were $0 (she didn't work there yet). For 2026 catch-up contributions to the new employer's 401(k), the test looks only at prior-year wages from that plan's sponsor — $0 — so she isn't wage-mandated into Roth there this year, regardless of how much she earned elsewhere. (Had she stayed at the old employer, its 2025 wages of $210,000 would have mandated Roth catch-up there.)

See the numbers against your own age, wages and tax rate in the Roth catch-up calculator — it tells you whether you're mandated, which limit applies, and the paycheck difference between pre-tax and Roth catch-up at your own tax rate.

Where to go next

• Is Roth or pre-tax the better choice when you do have a choice? The Roth vs. traditional calculator models the full tradeoff, not just the catch-up portion.
• Not sure how much to put in your 401(k) in the first place: the contribution-by-age guide and the 401(k) match calculator.
• Other year-end and open-enrollment numbers for 2026-2027: year-end tax moves and open enrollment limits for 2027.

Sources: SECURE 2.0 Act of 2022, §603 (IRC §414(v)(7)); IRS Notice 2023-62 (original 2-year transition relief); IRS final regulations TD 10033, published September 2025 (Treasury/IRS final rule on catch-up contributions, including the Roth requirement and the "no catch-up if no Roth feature" rule); IRS Notice 2025-67 (2026 cost-of-living adjustments: the $150,000 wage threshold and the $24,500 / $8,000 / $11,250 contribution limits). The statutory Roth-catch-up requirement took effect January 1, 2026; the final regulations formally apply to plan years beginning after December 31, 2026, with a good-faith reasonable-interpretation standard for 2026 itself.