01.10.26

Older Americans Making Catch-Up 401(k) Contributions Set for Tax Hit

by: Anne Tergesen

Older Americans making catch-up contributions to 401(k) plans may face higher taxes starting in 2026 due to a new federal rule. Workers aged 50 and over who earned more than $150,000 in the prior year must now direct catch-up contributions into Roth 401(k) accounts, losing the upfront tax deduction available with traditional accounts. Some plans will automatically apply the change, while others require employee consent, risking suspended contributions if no action is taken. The rule applies to 401(k), 403(b) and government 457(b) plans, but not IRAs.

Read the full article on The Wall Street Journal