Older workers who earn above certain thresholds will soon lose the ability to make pre-tax 401(k) catch-up contributions, a shift that could reshape retirement planning for high earners while leaving core limits intact for everyone else. Starting with tax years beginning after Dec. 31, 2026, catch-up contributions for workers age 50 and older who exceeded $145,000 in prior-year wages must be made on a Roth (after-tax) basis, with the IRS confirming the timeline in final regulations and maintaining a transition period through 2025 for plan administration.
Congress has set the earnings trigger at more than $145,000 of prior‑year FICA wages from the plan sponsor, indexed for inflation, and directed the Treasury and IRS to issue implementing regulations to operationalize the income look‑back and plan administration details across 401(k), 403(b), and governmental 457(b) plans.
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