The 2026 Roth Catch-Up Rule: What High-Income 403(b)/457(b) Participants Need to Know
Starting in 2026, a major change is coming to retirement plan catch-up contributions—and it will directly affect high-income earners age 50 and older who contribute to employer retirement plans like 403(b) and 457(b).
If you’re employed by a university, hospital, or government agency and participate in both a 403(b) and 457(b) plan, it’s essential to understand the upcoming Roth-only catch-up mandate and how it will shape your retirement contribution strategy.
Let’s break it down.
What’s Changing in 2026?
Under the SECURE 2.0 Act, Section 603, if you earn more than $145,000 in wages (as reported in Box 3 of your W-2) from your employer in the prior year, then any age-based catch-up contributions you make to your workplace retirement plan must be Roth (after-tax).
This rule applies to:
Effective Date:
Tax years beginning after December 31, 2025 (i.e., it kicks in for calendar year 2026 for most individuals).
Who Is Affected?
Any participant age 50 or older who earned more than $145,000 (indexed) from the sponsoring employer in the prior year (2025 for 2026 contributions).
The Roth-only catch-up rule does not apply in 2025. You may still make pre-tax catch-up contributions through December 31, 2025.
What Are the Contribution Limits?
While the IRS hasn’t released final 2026 numbers yet (typically published in October), here’s a projected scenario based on inflation adjustments:
|
Plan |
2025 Limit |
2026 Estimate |
Age 50+Catch-Up (Roth Only in 2026) |
|
403(b) |
$23,500 |
~ $24,000 |
$7,500 |
|
457(b) |
$23,500 |
~$24,000 |
$7,500 |
Total estimated elective deferrals in 2026 (age 50+): $63,000
Of which $15,000 must be Roth, assuming you exceed the $145k wage threshold.
Both plans use separate contribution limits—so you can max out both.
What About the 403(b) “15-Year Rule”?
If you’ve worked at the same eligible 403(b) employer (e.g., a public university) for 15 or more years, you may be eligible for a special service-based catch-up of:
However, the 15-year catch-up uses the same elective deferral bucket as the standard limit. The IRS coordination rules mean this catch-up gets counted first, before the age-50 catch-up.
IRS Regs: Treas. Reg. §1.403(b)-4(c)(3)(ii)
457(b) “Special Catch-Up” Option
Unlike 403(b) and 401(k) plans, governmental 457(b) plans offer a special 3-year catch-up rule:
IRS Source: IRC §457(b)(3)
In 2026, that could mean up to ~$47,000 in 457(b) deferrals—pre-tax—even if your age-50 catch-up would otherwise need to be Roth.
How Do Employer Contributions Factor In?
For 403(b) plans, the total amount of:
…must stay within the §415(c) “annual additions” limit—which is $70,000 in 2025 (indexed annually).
This means the 15-year catch-up contributions do count against the $70k cap—but age-50 and 457(b) catch-ups do not.
IRS Reference: IRC §415(c)
What You Can Do Now
✔ Verify your W-2 wages for 2025: If over $145,000, you’ll be subject to the Roth-only rule in 2026.
✔ Ensure your plan offers Roth options: Some 403(b)/457(b) plans still do not—if Roth is not available, the employer must suspend all catch-up contributions for affected employees in 2026 and beyond.
✔ Plan your paycheck: Since Roth contributions are after-tax, review your cash flow and tax strategy for 2026. The change could impact your take-home pay.
✔ Use both plans: The 403(b) and 457(b) plans use separate IRS contribution limits, so you can maximize both annually.
✔ Coordinate with HR or payroll: Separate codes should exist for regular deferrals, age-50 catch-ups, and any service-based catch-ups. Make sure Roth catch-up options are active by early 2026.
FAQ: 2026 Roth Catch-Up Contributions
Do I have to make Roth catch-up contributions if I’m over 50 in 2026?
Only if you earn more than $145,000 in wages from your employer in the prior year (i.e., 2025). If you earn less, you can still make catch-up contributions on a pre-tax basis.
What if my plan doesn’t have a Roth option?
Then no one can make catch-up contributions at all in 2026. Employers must update their plan documents and systems to allow Roth catch-ups by 2026 or suspend catch-ups entirely.
Can I still do both 403(b) and 457(b) catch-ups?
Yes! These are governed by separate IRS limits. You could contribute up to $63,000 in 2026 across both plans if eligible.
Can I use the 403(b) 15-year service catch-up and the age-50 catch-up in the same year?
Yes, but they must be coordinated carefully. The 15-year catch-up dollars are counted first, and the lifetime max is $15,000. Both can be used in the same year, assuming there's room under the deferral limit.
Can I make catch-up contributions to my 457(b) plan instead of Roth?
Yes, if you qualify for the special 3-year 457(b) catch-up (usually within 3 years of retirement). These contributions can still be pre-tax, and may allow deferrals up to twice the regular limit—which may be more favorable than the Roth catch-up if eligible.
Do catch-up contributions count toward the $70,000 §415(c) limit?
Final Thoughts
2026 will bring big changes to how high-income professionals can save for retirement. By understanding the Roth-only catch-up rule and how to maximize every option—across both 403(b) and 457(b) plans—you’ll be positioned to make the most of your peak earning years.
Have questions or want to model your 2026 contribution strategy? Let’s talk!.