Catch-Up Contributions Are Changing: Here’s What It Means for Your Freedom
Photo by Ben Collins
Retirement just got a little more complicated.
For decades, people in their 50s and 60s relied on “catch-up contributions” as a final push before retirement. Extra savings. Extra peace of mind.
But starting in 2026, the rules shift.
The Challenge
If you earn more than $145,000 a year, your catch-up contributions to a 401(k) can no longer go in pre-tax. Instead, they’ll be Roth dollars. Taxed upfront and then growing tax-free.
For some, that feels like a penalty. More taxes now. Less wiggle room in your paycheck.
For others, it’s confusing. Shouldn’t saving more always feel like winning?
The Shift
Here’s the truth: this isn’t about punishment. It’s about planning.
Think of it this way: you’re not losing a tool. You’re gaining a different one.
Pre-tax = relief today, taxes tomorrow.
Roth = taxes today, relief tomorrow.
The government just told high earners: your extra savings must live in the second bucket.
Why It Matters
If you’re closing in on retirement, this feels like another moving target. The rules keep changing. You don’t want surprises when your income shifts and your lifestyle depends on the money you’ve built.
That’s why this change matters. Not because of a few extra dollars in taxes. But because it forces you to ask bigger questions:
Do I want flexibility later, when work isn’t paying the bills?
Do I have the right balance between pre-tax and Roth savings?
Will my wealth give me choices or just obligations?
The Longevity Angle
Your wealthspan, the years you can live with freedom, health, and purpose, depends on more than how much you save. It depends on how accessible, tax-efficient, and resilient that money is.
Roth dollars can be a gift to your future self. They give you tax-free income when life is more about grandchildren, travel, and purpose, not W-2 paychecks.
This change may take some getting used to. But it can actually extend your wealthspan by diversifying how you access money down the road.
What To Do Now
Max out what you can under today’s rules (before 2026).
Work with a planner to balance pre-tax and Roth buckets.
Stop chasing tax breaks in isolation and start designing a strategy that gives you freedom, not just deductions.
Because here’s the point: retirement isn’t about taxes. It’s about choices.
The rules changed. But your future hasn’t. You still get to write the next chapter.
Schedule your Discovery Strategy Session today.
Disclaimer: The information provided is for educational purposes only and does not constitute investment, tax, or financial advice. Consult with a licensed professional before making financial decisions.
