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Retirement Plan Strategies For 2026
Advisors can help clients navigate a web of recent changes. By Eric L. Reiner
AS NEW AND NEW-ISH RULES ON RETIREMENT emerge, now is the time for all good retirement savers and their advisors to strategize for 2026. Come January 1, many high-income taxpayers age 50 and older will be seeing much different rules than they’ re used to when they’ re making catch-up contributions to employer-sponsored retirement plans. Those catch-ups may now have to be after-tax Roth contributions, and this dictate extends to the so-called“ super catch-up”— which is $ 11,250 for 2026 if the clients reach age 60, 61, 62 or 63 during the year( while the regular catch-up is $ 8,000).
The Roth requirement applies to a worker when the amount of Social Security wages reported by their employer in Box 3 of their Form W-2 exceeds $ 145,000( as indexed for inflation in $ 5,000 increments). In that case, the worker’ s catch-up contributions to that employer’ s plan in the following year must be Roth contributions, says attorney Lisa Tavares, a partner at Venable LLP in Washington, D. C.
In September, Internal Revenue Service regulations gave employers a“ good faith compliance” period until 2027 for finalizing plan amendments and the like; however,“ that doesn’ t mean they don’ t have to follow the rule” in 2026, says Tavares, who adds that there has been confusion about the rule’ s effective date.
The employee’ s earnings threshold is per employer, she points out. For example, say a taxpayer earns $ 100,000 from one employer in the first part of the year, then switches jobs and makes another $ 125,000 during the year from a different employer. Despite the fact that their full-year earnings are well above the Roth requirement’ s trigger, this hypothetical individual won’ t be subject to the rule in their second year with the new employer— because the previous year’ s earnings from that employer were below the threshold.
But some people escape the rule’ s grasp. That includes sole proprietors, partners and members of limited liability companies taxed as a partnership, people who don’ t receive W-2s for their services( no W-2, no Box 3), and who therefore don’ t need to make their catch-up contributions after taxes, according to
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