Starting January 1, 2026, if you made over $150,000 last year and you're 50 or older, Congress just rewrote your retirement playbook.

Here's the deal: The IRS announced new contribution limits for 2026, and buried in the fine print is a mandate most people haven't noticed yet. If your 2025 FICA wages (check Box 3 on your W-2) exceeded $150,000, your catch-up contributions to your 401(k) must be Roth.

Not "should be." Not "we recommend." Must.

The New Numbers

First, the good news—contribution limits went up across the board:

That extra $1,000 to your 401(k)? Compounds to $164,000 over 30 years at 10% returns. Worth adjusting your payroll deduction for.

The Mandatory Roth Part

Here's where it gets interesting. Under SECURE 2.0, high earners age 50+ can't make pretax catch-up contributions anymore.

Example: You're 55, made $175,000 in 2025.

Old rules (through 2025):

New rules (2026):

You just gave up $2,080 in tax deductions this year for tax-free growth later.

Why Congress Did This

Simple: revenue. Roth contributions get taxed now instead of in 30 years. High earners making catch-up contributions were an easy funding source for the rest of SECURE 2.0's goodies.

Whether you agree with the policy or not, it's federal law. No exemptions, no opt-outs.

The Employer Problem

Here's the catch: if your 401(k) plan doesn't offer Roth contributions, you literally can't make catch-up contributions starting in 2026.

About 33% of employer plans don't have Roth options yet. Those companies have until December 31, 2026 to add Roth deferrals or their $150K+ earners are locked out of catch-ups entirely.

Check with your HR department now. If they give you a confused look, forward them IRS Notice 2025-67 and tell them to call their plan administrator.

The Silver Lining

Tax diversification is actually smart. Having both pretax (traditional 401(k)) and Roth money in retirement gives you flexibility to manage your tax bracket when you withdraw.

Plus, if you're making $150K+ now, there's a decent chance you'll be in a similar or higher tax bracket in retirement. Paying taxes on $8,000 today at 32% might beat paying taxes on $30,000+ (after growth) at 35% later.

The forced Roth might accidentally be the right move for most people in this income range. You just don't get to decide—Congress decided for you.

What to Do This Week

Step 1: Check Box 3 on your 2025 W-2 (you'll get it in the next few weeks)

Step 2: If it's over $150K and you're 50+, verify your 401(k) offers Roth contributions

Step 3: Adjust your 2026 contribution to max the new $24,500 limit

Step 4: Make peace with the fact that your catch-up is going Roth whether you like it or not

One weekend of paperwork now beats scrambling in March when your payroll department tells you they can't process your catch-up contributions.

Most people set their 401(k) contribution once—usually when they start a new job—and never touch it again. Meanwhile, the IRS raises limits every year, and that "set it and forget it" approach leaves hundreds of thousands of dollars on the table.

Here's how to actually max your contributions in 2026.

Step 1: Log Into Your 401(k) Portal

This is usually through your payroll provider (Fidelity, Vanguard, Charles Schwab, ADP, etc.). If you don't know where to find it, ask HR or check your last 401(k) statement for the website.

Takes 2 minutes. You'll need your employee ID or SSN.

Step 2: Find Your Current Contribution Amount

Look for "contribution rate" or "deferral amount." It's usually shown as either:

If it's a percentage and you got a raise recently, you might already be close to the new limit. If it's a fixed dollar amount, you're probably leaving money on the table.

Step 3: Calculate What You Need to Max Out

2026 max contribution: $24,500

If you're paid biweekly (26 paychecks/year): $24,500 ÷ 26 = $942 per paycheck

If you're paid monthly (12 paychecks/year): $24,500 ÷ 12 = $2,042 per paycheck

If you're 50+, add catch-up: $24,500 + $8,000 = $32,500 total

If you're 60-63 and your plan allows super catch-up: $24,500 + $11,250 = $35,750 total

Step 4: Update Your Contribution

Change your deferral amount to the number you calculated above. Most plans let you choose between:

Remember: If you made $150K+ in 2025 and you're 50+, the catch-up portion must be Roth starting in 2026. The base $24,500 can still be pretax if you want.

Step 5: Verify Your Employer Match

While you're in there, make sure you're getting your full employer match. Common match formulas:

If your company matches up to 6% and you're only contributing 3%, you're leaving free money on the table. Always contribute at least enough to get the full match.

Step 6: Set a Calendar Reminder

Do this every January when new limits are announced. Takes 10 minutes. Ensures you're always maxing out.

Better yet, switch to a percentage instead of a fixed dollar amount if possible. That way if you get a raise, your contributions scale automatically.

The Compounding Impact

Let's say you've been contributing $20,000/year since 2019 because that was the limit when you set it up. The limit is now $24,500.

You're leaving $4,500/year on the table. Over 20 years at 10% returns, that's $258,000 in lost wealth.

Ten minutes to log in and adjust your contribution = a quarter-million dollars in retirement. Best ROI of any task you'll do this month.