A key provision of the Secure 2.0 Act takes effect in 2026, forcing higher-earning retirement savers to alter their tax strategy. Individuals who earned more than $145,000 in the prior year can no longer make pre-tax catch-up contributions to a traditional 401(k). Instead, all catch-up dollars must flow into a Roth account, where contributions are taxed upfront.

This change eliminates an immediate tax deduction for affected participants. For a higher-earner in the 24% tax bracket, contributing the maximum $8,000 catch-up amount to a Roth 401(k) in 2026 means paying roughly $1,920 more in taxes this year compared to the pre-2026 rules. The incentive to accelerate savings with a pre-tax break is gone for this group.

Despite the loss of an upfront tax break, contributing the maximum remains a powerful way to boost retirement wealth. A 50-year-old who consistently maxes out catch-up and later "super catch-up" contributions could accumulate around $200,000 by age 65, assuming a 5% annual return. One major caveat: not all employers match Roth contributions, so savers must confirm their plan's specific rules before proceeding.