Workers over 50 earning above $150,000 must use Roth accounts
The new rule affects workers 50 or older who earned over $150,000 in 2025 Social Security wages.
These workers must now put all 401(k) catch-up contributions into Roth accounts, resulting in upfront deductions worth $1,900 to $2,700 per year.
The standard employee deferral limit for a 401(k) this year is $24,500, and workers 50 or older can contribute an additional $8,000, but the catch-up amount must go into a Roth account if the income threshold is exceeded.
The threshold was originally set at $145,000 but is adjusted annually for inflation, and self-employment income does not count toward the threshold.