If you’re 50-plus and trying to max out retirement savings, 2026 is a year to double-check your settings. Limits increased, and SECURE 2.0 is changing how some higher-paid workers fund the extra dollars after age 50. The catch-up contributions you’ve counted on still work, but the tax treatment may shift based on prior-year wages. Use the steps below to avoid surprises and keep your plan on track.
1. Know the 2026 Maximums Before You Touch Payroll
For 2026, the elective deferral limit for most 401(k)-type plans is $24,500. If you’re 50 or older, the standard add-on is $8,000, so the typical total can reach $32,500. If you’re 60 to 63, the higher add-on remains $11,250, which can push the total to $35,750 if your plan allows it. If you set a percentage, run the math for your pay schedule so you land on the number you want. That one calculation prevents a late-year scramble or an accidental shortfall.
2. Catch-Up Contributions Can Be Forced Into Roth for High Earners
Starting in 2026, some workers must make the age-50+ extra amount as Roth (after-tax) inside employer plans. That means your catch-up contributions may not lower today’s taxable income the way pre-tax deposits did. If you rely on pre-tax to protect cash flow, the change can show up fast in take-home pay. The upside is more tax-free money later, which can help with retirement tax planning. Plan for the paycheck impact before your first 2026 deposit hits.
3. Use Your W-2 Box 3 to See if You’re “High Income” for This Rule
The test is based on prior-year FICA wages, not your current salary and not taxable income after deductions. For most employees, that number shows up as Social Security wages in Box 3 on your W-2. If it’s above the threshold (commonly described as $150,000 for the 2026 start date), your catch-up contributions must be Roth. Your plan will treat you based on that prior-year number, even if your income drops now. A bonus year or job change can push you over even if you don’t feel “high income.”
4. Confirm Your Plan’s Plumbing Before You Assume It’s Automatic
Even if your employer offers a Roth 401(k), payroll and the recordkeeper still have to code deposits correctly. That’s where catch-up contributions can get misrouted or capped without you noticing. Ask HR whether, if you’re subject to the Roth catch-up rule, your catch-up dollars will automatically route to Roth and how it will show on your paystub. On your first paystub, look for a separate line item that clearly labels the catch-up amount. Save a screenshot and compare it to what you see in the plan portal.
5. Adjust Your Mix So Your Paycheck Doesn’t Take a Surprise Hit
When catch-up contributions switch to after-tax Roth, your net pay can drop even if your gross pay doesn’t change. If that would strain your budget, reduce your base deferral a bit and rebuild toward the same year-end goal. Consider updating withholding too, since more after-tax saving can change your in-year tax picture. Keep it simple: choose a mix you can sustain, then automate it. If you’re unsure, a tax pro can sanity-check the plan in one short call.
6. Have a Backup Route if Your Workplace Plan Can’t Support the Change
If your plan can’t handle the Roth requirement cleanly, don’t let that stop you from saving in 2026. Maximize your regular deferral and use an IRA for the rest of your catch-up contributions goal, if you’re eligible. If income blocks Roth IRA contributions, a backdoor Roth may help, but taxes can apply under the pro-rata rule. Some workplace plans also allow after-tax contributions and in-plan conversions, but availability and fees vary. Pick a backup now so an admin hiccup doesn’t cost you a full year of progress.
The 2026 Retirement Move That Takes 10 Minutes and Pays Off All Year
Pull your W-2, confirm the 2026 limits your plan is using, and redo your per-paycheck math. Next, confirm whether your catch-up contributions will be routed to Roth based on prior-year wages, and write down what you learn. Then, set your election and check the first paystub to make sure it matches. If anything looks off, fix it immediately while the year is still young. Do this once, and the rest of 2026 gets a lot less stressful.
What’s your plan for 2026—are you leaning pre-tax, leaning Roth, or splitting the difference to stay flexible?
What to Read Next…
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How to Do a Phased Retirement in 2026
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