top of page

Understanding the SECURE Act 2.0

What High-Income Earners Need to Know About 401(k) Catch-Up Contributions in 2026

If you're a higher-income earner with an employer-sponsored retirement plan, a significant rule change under the SECURE Act 2.0 may directly affect how you save for retirement, and it's important to understand exactly what's required of you.

 

The New Rule, Explained

Starting in 2026, employees earning over $150,000 (indexed for inflation) are required to make all catch-up contributions on an after-tax basis, meaning they must go into a Roth account. Pre-tax catch-up contributions are no longer an option for this group.

 

This requirement applies across several plan types, including:

  • Traditional 401(k) plans

  • Traditional 403(b) plans

  • Governmental 457(b) plans

 

What This Means for You

Regardless of your income level, pre-tax contributions are still permitted up to the $24,500 standard limit. The distinction comes with catch-up contributions:

  • Earn over $150,000? Your catch-up contributions must be made with Roth (after-tax) dollars.

  • Earn less than $150,000? You may continue making all contributions, including catch-up, on a pre-tax basis.

 

Why Was This Change Made?

Congress designed this provision to encourage higher-income earners to build after-tax retirement savings. While pre-tax contributions lower your taxable income today, Roth contributions grow tax-free. They are withdrawn tax-free in retirement, a meaningful advantage for those likely to be in a higher tax bracket later in life.

 

A Note on Roth Availability

Your employer's plan must offer a Roth option for this rule to apply to your catch-up contributions. If your plan doesn't currently include one, don't panic; the IRS has issued transitional guidance (Notice 2024-02) allowing affected employees to continue making catch-up contributions on a pre-tax basis in the interim. This is a temporary accommodation, not a permanent fix, so it's worth checking with your HR department or plan administrator on their timeline for adding a Roth feature.


Have questions about how this rule affects your specific situation? Reach out to your financial advisor; we're here to help you navigate these changes and make the most of your retirement savings strategy.

Whitaker-Myers Wealth Managers is an SEC-registered investment adviser firm. The information presented is for educational purposes only and intended for a broad audience. The information does not intend to make an offer or solicitation to sell or purchase any specific securities, investments, or investment strategies. Investments involve risk and are not guaranteed. Whitaker-Myers Wealth Managers reasonably believes that this marketing does not include any false or misleading statements or omissions of facts regarding services, investment, or client experience. Whitaker-Myers Wealth Managers has a reasonable belief that the content will not cause an untrue or misleading implication regarding the adviser’s services, investments, or client experiences. Please refer to the firm’s ADV Part 2A for material risks disclosures.

​

Past performance of specific investment advice should not be relied upon without knowledge of certain circumstances of market events, the nature and timing of the investments, and relevant constraints of the investment. Whitaker-Myers Wealth Managers has presented information in a fair and balanced manner.

​

Copyright (c) 2023 Clearnomics, Inc. and Whitaker-Myers Wealth Managers, LTD. All rights reserved. The information contained herein has been obtained from sources believed to be reliable, but is not necessarily complete and its accuracy cannot be guaranteed. No representation or warranty, express or implied, is made as to the fairness, accuracy, completeness, or correctness of the information and opinions contained herein. The views and the other information provided are subject to change without notice. All reports posted on or via www.clearnomics.com or any affiliated websites, applications, or services are issued without regard to the specific investment objectives, financial situation, or particular needs of any specific recipient and are not to be construed as a solicitation or an offer to buy or sell any securities or related financial instruments. Past performance is not necessarily a guide to future results. Company fundamentals and earnings may be mentioned occasionally, but should not be construed as a recommendation to buy, sell, or hold the company's stock. Predictions, forecasts, and estimates for any and all markets should not be construed as recommendations to buy, sell, or hold any security--including mutual funds, futures contracts, and exchange traded funds, or any similar instruments. The text, images, and other materials contained or displayed in this report are proprietary to Clearnomics, Inc. and constitute valuable intellectual property. All unauthorized reproduction or other use of material from Clearnomics, Inc. shall be deemed willful infringement(s) of this copyright and other proprietary and intellectual property rights, including but not limited to, rights of privacy. Clearnomics, Inc. expressly reserves all rights in connection with its intellectual property, including without limitation the right to block the transfer of its products and services and/or to track usage thereof, through electronic tracking technology, and all other lawful means, now known or hereafter devised. Clearnomics, Inc. reserves the right, without further notice, to pursue to the fullest extent allowed by the law any and all criminal and civil remedies for the violation of its rights.

Add a Title

Add a Title

Add a Title

Add a Title

Info

Read more...

Add a Title

Add paragraph text. Click “Edit Text” to customize this theme across your site. You can update and reuse text themes.

Read more...

Add a Title

Add paragraph text. Click “Edit Text” to customize this theme across your site. You can update and reuse text themes.

Read more...

Whitaker-Myers Wealth Managers is an SEC-registered investment adviser firm. The information presented is for educational purposes only and intended for a broad audience. The information does not intend to make an offer or solicitation to sell or purchase any specific securities, investments, or investment strategies. Investments involve risk and are not guaranteed. Whitaker-Myers Wealth Managers reasonably believes that this marketing does not include any false or misleading statements or omissions of facts regarding services, investment, or client experience. Whitaker-Myers Wealth Managers has a reasonable belief that the content will not cause an untrue or misleading implication regarding the adviser’s services, investments, or client experiences. Please refer to the firm’s ADV Part 2A for material risks disclosures.

​

Past performance of specific investment advice should not be relied upon without knowledge of certain circumstances of market events, the nature and timing of the investments, and relevant constraints of the investment. Whitaker-Myers Wealth Managers has presented information in a fair and balanced manner.

​

Copyright (c) 2023 Clearnomics, Inc. and Whitaker-Myers Wealth Managers, LTD. All rights reserved. The information contained herein has been obtained from sources believed to be reliable, but is not necessarily complete and its accuracy cannot be guaranteed. No representation or warranty, express or implied, is made as to the fairness, accuracy, completeness, or correctness of the information and opinions contained herein. The views and the other information provided are subject to change without notice. All reports posted on or via www.clearnomics.com or any affiliated websites, applications, or services are issued without regard to the specific investment objectives, financial situation, or particular needs of any specific recipient and are not to be construed as a solicitation or an offer to buy or sell any securities or related financial instruments. Past performance is not necessarily a guide to future results. Company fundamentals and earnings may be mentioned occasionally, but should not be construed as a recommendation to buy, sell, or hold the company's stock. Predictions, forecasts, and estimates for any and all markets should not be construed as recommendations to buy, sell, or hold any security--including mutual funds, futures contracts, and exchange traded funds, or any similar instruments. The text, images, and other materials contained or displayed in this report are proprietary to Clearnomics, Inc. and constitute valuable intellectual property. All unauthorized reproduction or other use of material from Clearnomics, Inc. shall be deemed willful infringement(s) of this copyright and other proprietary and intellectual property rights, including but not limited to, rights of privacy. Clearnomics, Inc. expressly reserves all rights in connection with its intellectual property, including without limitation the right to block the transfer of its products and services and/or to track usage thereof, through electronic tracking technology, and all other lawful means, now known or hereafter devised. Clearnomics, Inc. reserves the right, without further notice, to pursue to the fullest extent allowed by the law any and all criminal and civil remedies for the violation of its rights.

bottom of page