Retirement Savers Be Warned: A Tax Break Has Disappeared in 2026

By: Tim Grant/Pittsburgh Post-Gazette (TNS)

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For years, workers approaching retirement had some valuable flexibility when it came to making catch-up contributions to their retirement accounts.

They could decide whether to take the immediate tax break of pretax savings in their 401(k) plans or build tax-free income they could access later from a Roth individual retirement account.

But starting in January 2026, that choice will disappear for high-income earners.

Under a new federal rule, employees 50 and older who earned $150,000 or more the prior year will be required to make their catch-up contributions on an after-tax basis. The catch-up contributions must be made into a Roth IRA rather than a traditional 401(k) or 403(b).

For 2026, the maximum contribution for employees under 50 is $24,500, with an extra $8,000 catch-up for those 50 and older. For ages 60-63, the catch-up contribution increases to $11,250.

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