What new catch-up rules mean for your retirement savings

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When it comes to retirement savings, even small rule changes can open meaningful opportunities to plan with more intention and make informed choices about your future. One such change is on the horizon: Beginning in 2026, certain higher-earning employees will see new rules for how their catch-up contributions must be made.

Catch-up contributions are additional savings you can make to retirement plans like a 401(k), 403(b) or governmental 457(b) once you hit age 50. Historically, if an employee has made pre-tax contributions to their retirement plan, the catch-up contributions have also been made on a pre-tax basis. Conversely, Roth contributions are made with after-tax dollars and have the potential to grow tax-deferred, with earnings that may be withdrawn tax-free if certain conditions are met—an advantage that may help your savings last longer in retirement

What’s changing

In September, the IRS finalized regulations tied to the SECURE 2.0 Act, clarifying how the new catch-up contribution rule will work.

Starting January 1, 2026, employees who earned more than $145,000 in the prior year (based on 2025 wages), and want to make catch-up contributions to their employer-sponsored plan, must make those contributions as Roth contributions, not pre-tax.

This new rule applies not only to standard catch-up contributions for those 50 and older but also to the new “super catch-up” option available to employees turning ages 60 through 63 during the year.

Keep in mind that if your employer’s plan does not currently offer a Roth feature, you won’t be able to make catch-up contributions unless the plan is updated to include one.

Employees who earned $145,000 or less in the prior year aren’t affected by this change. You can continue making catch-up contributions on a pre-tax or Roth basis, depending on what your plan allows.

Understanding this update can help you think more strategically about where your future contributions go, and how those decisions may shape your retirement income.

Why it matters—and how it can work to your advantage

For many high-earning retirement savers, this change may alter how contributions affect take-home pay and future taxes. While it requires some planning, it also brings some potential long-term benefits:

• You’ll pay taxes now, but gain the potential for tax-deferred growth and tax-free withdrawals later. Roth contributions are made with after-tax dollars, which may mean a slightly smaller paycheck today, but potentially greater flexibility down the road. Future withdrawals are generally tax-free if certain conditions are met—generally once the account has been open at least five years and withdrawals occur after age 59½. This structure can help reduce taxable income in retirement and provide greater predictability as you plan for the long term with greater confidence.

• It encourages greater tax diversification. Building both pre-tax and Roth assets can give you more choice in how you draw income later on, helping you and your advisor strategically manage distributions and taxes throughout retirement, and make informed decisions each year as your goals and tax situation evolve.

• It can strengthen your legacy strategy. Because Roth assets generally pass to heirs income tax free under current tax rules, this shift may help you leave more to the next generation and align with your broader estate and family wealth goals.

• Your plan may expand. Many employers are adding or enhancing Roth options to comply with this rule, meaning you could soon have more ways to build tax-efficient savings and personalize how you invest for the future.

Next steps for your retirement strategy

Even though the rule won’t take effect until 2026, now is a good time to start planning. Confirm whether your employer-sponsored plan offers a Roth option, or if they intend to add one in the near future.

Then, talk with your Mariner advisor about how this change could fit into your broader strategy. Together, you can explore ways to balance pre-tax and Roth savings, manage the timing of contributions and make the most of tax-efficient growth opportunities in the years ahead.

Thoughtful preparation today can turn a rule change into a chance to strengthen your long-term retirement plan and feel more confident that your savings strategy is working as hard as you are.

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