Catch-Up Contributions

Catch-up contributions are the extra deferral allowance that starts in the year the account holder turns 50. In 2026 the standard catch-up adds $8,000 on top of the $24,500 employee deferral in a 401(k), 403(b), or 457(b), bringing the personal ceiling to $32,500. IRAs allow a smaller catch-up, indexed under SECURE 2.0, and HSAs allow $1,000 from age 55 rather than 50. SIMPLE plans carry their own higher catch-up schedule.

SECURE 2.0 added two wrinkles. From 60 to 63, the super catch-up raises the workplace limit to 150% of the standard figure, which is $12,000 in 2026. And from 2026, employees earning more than roughly $150,000 in prior-year wages must make every catch-up dollar as Roth, ending pre-tax catch-ups at that income level. Nothing escalates automatically: the election is filed with the employer, or not made at all.

The mechanics are an election, not a graduation gift. In the year an employee turns 50, the plan's contribution screen adds a catch-up field; the deferral can then run to $32,500 instead of $24,500, still capped at 100% of compensation. Employer contributions do not count against the catch-up: it is personal deferral room only, and the match continues on top. The super catch-up replaces the standard one from 60 through 63 with 150% of the figure, $12,000 in 2026, before reverting to $8,000 at 64.

The Roth mandate is the compliance wrinkle. For 2026, an employee whose prior-year FICA wages from the employer passed roughly $150,000 must make every catch-up dollar as Roth deferrals, and the plan is required to enforce it. Pre-tax catch-ups remain available below that line. The election does not persist: a new plan year resets the deferral to the standard amount, and a raise that crosses the wage threshold flips the catch-up to Roth at the next payroll cycle. The IRA and HSA catch-ups run on separate schedules, set at the account level rather than the employer.

The decade from 50 to 60 is usually the highest-earning, lowest-expense stretch of a career, and the catch-up is sized for exactly that window. The extra $8,000 a year from 50 to 67 is $136,000 of additional principal; at a 7% return it adds roughly $247,000 to the balance by 67. That is the largest single lever most Americans can pull in their last working decade, and it costs nothing but an election.

I watched a colleague named Brent (yes, that Brent) turn 50, receive the plan's letter announcing the new catch-up field, and file it under the pizza coupons. Six years of the standard deferral later, he had left $48,000 of contribution room unused. At a 7% return that room was worth roughly $57,000 by 56 and closer to $120,000 by 67.

The highest-leverage thing most Americans over 50 can do is raise the deferral to the catch-up ceiling the January they turn 50. Let payroll make it boring. Price the outcome with the retirement savings calculator, and the delay savings calculator shows what each unfiled year costs.