2026 SECURE Act 2.0 Catch-up Changes

Beginning in 2026, a key provision of the SECURE Act 2.0 changes how higher-earning professionals fund the final years of retirement savings.

Under the new rules administered by the Internal Revenue Service, individuals age 50 and older who earn more than $150,000 in prior-year wages from their employer may still make catch-up contributions to their 401(k), 403(b), or 457(b) plans but those catch-up dollars must now be contributed on a Roth (after-tax) basis, rather than pre-tax.

In practical terms, this shifts the tax benefit from an upfront deduction to permanent tax-free growth and withdrawals in retirement, subtly increasing near-term tax exposure while enhancing long-term flexibility. For many executives and business owners, this change reinforces the importance of proactive cashflow planning and thoughtful tax diversification, as retirement strategies increasingly emphasize when taxes are paid not simply whether they are paid.

Here is an example of what this looks like for an individual making $400,000/ year at age 63.

• Compensation: $400,000 W-2

• Filing status: Married Filing Jointly

• Employer offers a 401(k) with Roth capability

• Prior-year wages exceed $150,000 → SECURE Act 2.0 applies

• Governed by rules from the Internal Revenue Service

Maximum Employee Contributions (2026)

At age 60–63, the IRS allows a higher “super catch-up” contribution.

Contribution Type	Amount	Tax Treatment
Standard 401(k) deferral	$24,500	Pre-tax or Roth (choice)
Super catch-up (age 60–63)	$11,250	Roth only
Total employee contribution	$35,750	Mixed

Because income exceeds $150,000, every dollar of catch-up must be Roth.

2025 vs. 2026 Retirement & Gift Tax Limit Comparison

Category	2025 Limit	2026 Limit	Change
401(k), 403(b), 457(b) Deferral	$23,500	$24,500	$1,000
401(k)/403(b)/457 Catch-Up (Age 50+)	$7,500	$8,000	$500
“Super Catch-Up” (Ages 60–63)	$11,250	$11,250	$0
Total 401(k)/403(b)/457 (Employee + Employer)	$70,000	$72,000	$2,000
Traditional/Roth IRA Contribution (under 50)	$7,000	$7,500	$500
IRA Catch-Up (Age 50+)	$1,000	$1,100	$100
SIMPLE IRA/401(k) Deferral	$16,500	$17,000	$500
SIMPLE Catch-Up (Age 50+)	$3,500	$4,000	$500
SEP-IRA (Defined Contribution)	$70,000	$72,000	$2,000
HSA (Self-Only)	$4,300	$4,400	$100
HSA (Family)	$8,550	$8,750	$200
HSA Catch-Up (55+)	$1,000	$1,000	$0
Annual Gift Tax Exclusion (per couple)	$19,000 ($38,000)	$19,000 ($38,000)	$0
Gift to Non-Citizen Spouse Exclusion	~$190,000	~$194,000	$4,000
Lifetime Estate & Gift Tax Exemption	$13.99M	$15.00M	$1,001,000

Traditional IRA Deductibility Phase-Outs

(When taxpayer or spouse is covered by a workplace retirement plan)

Single / Head of Household (covered by plan)

Tax Year	Fully Deductible	Phase-Out Range	Not Deductible
2025	≤ $77,000	$77,000 – $87,000	≥ $87,000
2026	≤ $79,000	$79,000 – $89,000	≥ $89,000

Married Filing Jointly

Taxpayer covered by plan

Tax Year	Fully Deductible	Phase-Out Range	Not Deductible
2025	≤ $123,000	$123,000 – $143,000	≥ $143,000
2026	≤ $126,000	$126,000 – $146,000	≥ $146,000

Spouse covered by plan (taxpayer NOT covered)

Tax Year	Fully Deductible	Phase-Out Range	Not Deductible
2025	≤ $230,000	$230,000 – $240,000	≥ $240,000
2026	≤ $236,000	$236,000 – $246,000	≥ $246,000

Married Filing Separately

Tax Year	Phase-Out Range
2025 & 2026	$0 – $10,000

Roth IRA Income Phase-Outs (Modified Adjusted Gross Income – MAGI)

Single / Head of Household

Contribution Eligibility	2025 TAX YEAR	2026 TAX YEAR
Full Contribution	≤ $146,000	≤ $150,000
Phase-Out Range	$146,000 – $161,000	$150,000 – $165,000
No Contribution	≥ $161,000	≥ $165,000

Married Filing Jointly

Contribution Eligibility	2025 TAX YEAR	2026 TAX YEAR
Full Contribution	≤ $230,000	≤ $236,000
Phase-Out Range	$230,000 – $240,000	$236,000 – $246,000
No Contribution	≥ $240,000	≥ $246,000

Married Filing Separately (Lived With Spouse)

Tax Year	Phase-Out Range
2025 & 2026	$0 – $10,000