09.24.25

High Earners Age 50 and Older Are About To Lose a Major 401(k) Tax Break

by: Ashlea Ebeling

Starting in 2026, high earners making more than $145,000 will face new restrictions on 401(k) catch-up contributions. Under the tax rules, the extra savings for workers 50 and older must go into Roth accounts, meaning taxes are paid upfront instead of deferred until retirement. The mandate, stemming from a 2022 law, removes the upfront deduction and could push savers into higher tax brackets or disqualify them from other tax breaks. Those without access to Roth 401(k) plans may be unable to make catch-up contributions at all, though most large plans now offer Roth options. Some advisors note Roth savings could still benefit long-term retirement planning.

Read the full article on The Wall Street Journal