Quick Read – Mandatory Roth catch-up rules in 2026 eliminate the upfront deduction worth $2,560 for high earners in the 32% bracket. – A $2.3M 401(k) growing at 6% produces six-figure RMDs at 73, stacking with Social Security to trigger IRMAA surcharges and ~40% effective rates….
Brokerage accounts cap investment taxes at 23.8% versus roughly 40% on forced RMDs, a difference that amounts to $64,000 on $400,000 of retirement withdrawals. – A reader on a Bogleheads forum recently posed the question that frames this entire piece: at 58 with $2.3 million already saved in a traditional 401(k), why keep stuffing more pretax dollars into an account future-you will hate? The default planner answer still defaults to “max it out.” For high earners with seven-figure balances, that answer is wrong by 2026
Three rule changes have flipped the math: the SECURE 2.0 mandatory Roth catch-up for those who earned more than $150,000 in 2025, the IRMAA premium surcharges that ride on top of withdrawals, and a tax code where long-term capital gains still top out at 23.8% while the top ordinary rate climbs to 37%. Cutting 401(k) deferrals in half and redirecting the freed cash to a taxable brokerage is the cleaner path at this balance. Why the standard advice breaks at $2.3M The 2026 standard employee deferral limit is $24,500.
Add the age 50-plus catch-up of $8,000 and the cap rises to $32,500. The 60-to-63 super catch-up pushes it to $35,750, but that does not apply yet to a 58-year-old. Starting this year, if W-2 wages crossed $150,000 in 2025, that catch-up must go into a Roth 401(k).