The 2026 Roth Catch-Up Threshold Is $150,000, Not $145,000 — Here's Why It Changed

A Rule That Took Effect With Its Numbers Still Shifting

Starting with the 2026 plan year, a SECURE 2.0 provision requires higher earners age 50 and older to make their catch-up contributions to a 401(k), 403(b), or governmental 457(b) plan as Roth (after-tax) contributions instead of traditional pre-tax ones. The rule itself isn't new news — plan sponsors have been preparing for it since the provision was written. What's causing confusion right now is the exact income line that decides who it applies to.

The statute originally set the threshold at $145,000 in prior-year wages. But the IRS issued Notice 2025-67 on November 13, 2025 — barely six weeks before the rule took effect — indexing that threshold up to $150,000, based on 2025 FICA wages, for the 2026 plan year. A lot of the explainer content published before that notice, and some payroll guidance built around the original number, is now describing the wrong cutoff.

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Who This Actually Affects

• You're 50 or older during 2026 (the catch-up contribution itself is only available to this group).
• Your employer reported more than $150,000 in FICA wages for you in 2025. This is based specifically on wages from the employer sponsoring the plan you're contributing to — not household income, not income from a different employer if you changed jobs, and not self-employment income run through a Schedule C.
• You participate in a 401(k), 403(b), or governmental 457(b) plan. The rule doesn't apply to SIMPLE IRA or SEP plans.

If you're under the threshold, nothing changes — you can still choose pre-tax or Roth catch-up contributions as your plan allows, same as before.

What "Must Be Roth" Actually Means in Practice

If you're above the $150,000 line, only the portion of your contribution *above* the standard 401(k) limit — the catch-up amount — has to go in as Roth. Your contributions up to the standard limit can still be pre-tax if you prefer. For 2026, the standard 401(k) elective deferral limit is $24,500, with a $8,000 standard catch-up for those 50+, and an enhanced $11,250 catch-up for those specifically aged 60–63 under SECURE 2.0's special provision. It's only that catch-up slice — not your entire contribution — that the Roth requirement touches.

Practically: contributions go in after-tax, meaning no upfront deduction on that portion, but qualified withdrawals in retirement — including all the growth on that money — come out completely tax-free, provided you're 59½ and the account has been open at least five years.

What Happens If Your Plan Doesn't Offer a Roth Option

This is the detail catching some employers off guard: the rule doesn't create an exception for plans without a Roth feature. If your plan doesn't offer Roth deferrals and you're above the wage threshold, you simply lose the ability to make catch-up contributions at all for 2026 — not "make them pre-tax instead." The IRS regulations also specifically prohibit an employer from solving this by forcing *all* participants into Roth catch-up regardless of income, so a plan sponsor has to either add a Roth option or accept that its highest earners lose access to catch-up contributions entirely.

If you're not sure whether your plan added Roth deferrals in time for 2026, that's worth confirming directly with your plan administrator or HR now, rather than after you notice a missing catch-up contribution on a pay stub.

2026 Contribution Limits at a Glance

Why the Threshold Moved

The $145,000 figure in the original statute was written as a fixed number subject to annual inflation adjustment, similar to how other retirement plan limits are indexed. The IRS's November 2025 notice applied that indexing for the first time heading into 2026, landing on $150,000 — a $5,000 increase. Because the adjustment came so close to the rule's effective date, some earlier coverage, calculators, and even payroll system configurations were built around the original $145,000 figure and haven't all been corrected. If you've seen both numbers cited in different places, this is why — and $150,000 based on 2025 wages is the figure that actually governs 2026 contributions.

Frequently Asked Questions

Does the $150,000 threshold apply to my 2026 income or my 2025 income?

Your 2025 wages from the plan-sponsoring employer. The determination is made using the prior year's earnings, so a raise that pushes you over $150,000 in 2026 itself won't affect your catch-up treatment until the 2027 plan year.

Does this affect IRA catch-up contributions?

No. The mandatory Roth catch-up rule applies specifically to employer-sponsored plans — 401(k), 403(b), and governmental 457(b) — not to Traditional or Roth IRA catch-up contributions, which have their own separate rules and limits.

Will the $150,000 threshold change again next year?

It's indexed for inflation, so the IRS will likely adjust it again for future plan years, the same way it adjusts contribution limits annually. Expect an updated notice in the second half of 2026 for the 2027 threshold.

I'm self-employed with a solo 401(k) — does this apply to me?

The wage threshold is based on FICA wages from an employer, which doesn't map directly onto self-employment income. Solo 401(k) rules around this provision have nuances specific to self-employed filers — check with a tax professional about how the mandatory Roth catch-up applies to your specific plan structure.

This article summarizes IRS Notice 2025-67 and general SECURE 2.0 catch-up contribution rules and is not personalized tax or retirement advice; confirm how the rule applies to your specific plan and wages with your plan administrator or a tax professional — see current 2026 retirement contribution limits for the full picture.