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What to Know About 401(k) Catch-Up Contributions in 2026
As employees get closer to retirement, they may start looking for ways to increase the amount they are saving through their workplace retirement plan.
That is where catch-up contributions come in.
A catch-up contribution allows eligible employees age 50 and older to contribute additional money to a 401(k) beyond the standard annual employee contribution limit.
For 2026, employees can generally contribute up to $24,500 to a 401(k). Employees age 50 and older may be eligible to contribute an additional $8,000, bringing their potential employee contribution total to $32,500.
For some employees, however, the rules look a little different.
A Higher Catch-Up Limit for Ages 60 Through 63
Under provisions of the SECURE 2.0 Act, employees who turn age 60, 61, 62, or 63 during the calendar year may qualify for a higher catch-up contribution limit.
For 2026, that higher catch-up limit is $11,250.
That means an eligible employee in this age range could potentially contribute up to $35,750 to a 401(k) in 2026 through employee deferrals, depending on the terms of the plan.
Once an employee is outside that age range, the standard age 50-and-older catch-up limit generally applies again.
Some Catch-Up Contributions Must Be Roth
Another change taking effect in 2026 involves certain higher-paid employees.
Generally, if an employee earned more than $150,000 in FICA wages from the employer sponsoring the plan during the previous year, any catch-up contributions made in 2026 must be made as Roth contributions if the plan permits catch-up contributions.
Roth 401(k) contributions are made with after-tax dollars rather than on a pre-tax basis.
This does not mean all of the employee's 401(k) contributions must be Roth. The rule applies specifically to catch-up contributions for participants who meet the applicable wage threshold.
Why This Matters for Employers
These changes are important for employees approaching retirement, but they also matter to plan sponsors.
Employers may want to make sure their retirement plan, payroll system, and recordkeeping processes are prepared to properly identify eligible participants and apply the appropriate contribution rules.
It may also be a good time to review how these changes are being communicated to employees.
An employee who has been contributing to a 401(k) for years may not realize that reaching a certain age can change how much they are eligible to contribute.
Likewise, an employee affected by the Roth catch-up requirement may benefit from understanding why the treatment of their catch-up contribution has changed.
A Good Time to Review the Plan
Retirement plan rules continue to evolve, and contribution limits can change from year to year.
For plan sponsors, periodic reviews can help identify whether plan provisions, payroll processes, and employee communications remain aligned with current requirements.
For employees, understanding the contribution options available through an employer-sponsored retirement plan can help them make more informed decisions about their retirement savings.
Catch-up contributions are only one part of a retirement plan, but for employees approaching retirement, they may be an important feature to understand.
Plan provisions vary, and individual tax circumstances differ. Participants should review their plan documents and consult with their financial or tax professional regarding their individual situation.