Dollar Almanac

Roth Catch-Up Mandate Calculator

Updated

A rule that takes effect for the first time this year, applies to more people than expected, and has one outcome nobody sees coming.

If your Social Security wages from this employer last year were above $150,000, your catch-up contributions this year must be made as Roth rather than pre-tax, and if your plan offers no Roth option you cannot make them at all.

The age you turn during the calendar year, not your age today. Turning 50 in December counts for the whole year.

Box 3 of last year's W-2, from the employer that sponsors this plan. Not your salary, and not the total across jobs.

Plan type

A TSP or a governmental 457(b) follows the first option. A SIMPLE IRA is outside this rule entirely; a SIMPLE 401(k) is not.

Does your plan offer Roth contributions?

If you do not know, leave this as it is. The result says what changes if the answer is no.

On top of the ordinary deferral limit. Capped at this year's catch-up limit for your age.

Used only to work out what the lost deduction is worth at your rate.

Filing status

Catch-up you may contribute

$8,000.00

Catch-up limit for your age
$8,000.00
Must be Roth
$8,000.00
Extra tax this year
$1,920.00
Marginal rate
24.00%
Threshold
$150,000

Prior-year wages were $10,000.00 over the threshold, and the lost deduction is priced at your marginal rate. State tax is not included.

warning: Worth confirming your plan offers Roth

These figures assume it does, which is the common case. If it does not, the answer is not $1,920.00 of extra tax: it is that you cannot make the catch-up at all. Ask your plan administrator whether Roth catch-up is accepted for this year.

warning: Your catch-up must be Roth this year

The amount does not change. What changes is where it comes from: after-tax pay rather than pre-tax, so this year's deduction goes and the money grows tax-free instead.

warning: You are close to the threshold

A raise or a bonus moves you across this line. The test runs again every year, so being under it once says nothing about next year.

What this does not cover (4)

info: The test uses W-2 Box 3, not your salary

Box 3 stops at the Social Security wage base. Earn well above that and the figure the rule tests is lower than your pay. It is not Box 1 either, because pre-tax deferrals reduce Box 1 and leave Box 3 alone.

info: Counted per employer

Only wages from the employer sponsoring this plan count. Changing jobs resets the test, so a high earner who started somewhere new is usually outside the rule in year one.

info: Federal income tax only

States that tax income generally allow the same pre-tax treatment, so there is usually a state cost on top of the federal one shown.

info: An estimate, not advice

Your plan document governs what it permits, and plans vary in ways no calculator can see. Confirm with your administrator before changing an election.

What this assumes

Assumption set limits 2026

Age reached this year
55
Plan type
401(k)
Prior-year wage threshold
Notice 2025-67, §414(v)(7)(A)
Wage measure
W-2 Box 3, prior year
Deduction
Standard deduction
Tax year
2026

Limits from Notice 2025-67, read August 19, 2026

How this works

A catch-up contribution is the extra amount anyone aged 50 or over may put into a workplace retirement plan, on top of the ordinary limit. Until this year you could choose whether it went in pre-tax or as Roth. For higher earners, that choice is gone.

The test has four parts, and each is a way to reach a confident wrong answer:

  • It looks at last year, not this one. Your previous year’s wages decide this year’s treatment.
  • It uses Box 3 of your W-2, Social Security wages, which stop at the wage base. That figure is lower than the pay of anyone earning well above it, and it is not the same as the taxable wages in Box 1 either, because pre-tax deferrals reduce Box 1 and not Box 3.
  • It counts one employer at a time. Only wages from the employer sponsoring your plan. Changing jobs resets the test.
  • Some plans are outside it. SEP plans and SIMPLE IRAs are excluded whatever you earned. A SIMPLE 401(k) is not.

Where the rule does apply, the amount you can contribute does not change. Only its tax treatment does, and the cost this year is the deduction you no longer get, valued at your marginal rate. That is the figure this calculator prices.

The exception to all of that is a plan with no Roth option. Then there is no version of the contribution that is allowed, and the catch-up cannot be made at all. It is the one outcome here with no number attached, and the one most worth acting on early.

Worked example

Marcus is 55 and files as single. He earns $200,000 this year, and last year his W-2 from the same employer showed $160,000 in Box 3. He wants to make the full catch-up contribution of $8,000 on top of his ordinary deferral.

Does the rule reach him

His prior-year Social Security wages of $160,000 are above the $150,000 threshold, so yes. His catch-up has to be Roth. The amount he may contribute does not change. What changes is that it comes out of after-tax pay.

What that costs him this year

Pre-tax, the $8,000 would have come off his taxable income. After the standard deduction of $16,100 his taxable income is $183,900, which sits inside the 24% band, and it would have been $175,900 with the catch-up made pre-tax. Both figures are in the same band, so the deduction was worth 24% of the whole amount:

$8,000 × 24% = $1,920.00 more tax this year.

That is the whole cost of the mandate to him. He still contributes the same $8,000, and it grows tax-free from here rather than being taxed on the way out.

The version that costs him far more

Now suppose his plan has no Roth option. He is not allowed to make the catch-up pre-tax, and there is nowhere Roth to put it. There is no fallback:

He can contribute $0.00 in catch-up contributions this year.

Not $8,000 taxed differently. Nothing. The retirement contribution he was counting on cannot be made at all, and the first he is likely to hear of it is a rejected payroll election. This is the outcome worth checking before the year runs out, because a plan that adds a Roth option mid-year fixes it, and one that does not cannot be worked around.

What this does not tell you

Whether Roth is better for you than pre-tax, which depends on your rate now against your rate in retirement and is a judgement rather than a sum. What your specific plan document permits, which varies in ways no calculator can see. Whether your employer has added a Roth option for this year, which is a question for your plan administrator and the single most useful one to ask.

It also models federal income tax only. States that tax income generally allow the same pre-tax treatment, so where the deduction is lost there is usually a state cost on top of the figure shown here.

Sources

References used to explain this page. Listing a publisher is not a claim that they endorse it.

Figures are transcribed from these documents directly. Where a value has not been verified against its source, this page shows no number rather than an estimate.

Questions

What happens if my plan does not offer Roth contributions?
You cannot make catch-up contributions at all. This is the part people are most often caught by, because the natural assumption is that the contribution falls back to pre-tax. It does not. If the rule applies to you and there is nowhere Roth to put the money, the catch-up simply cannot be made, and most people find out when payroll rejects the election. Many plans added a Roth option specifically for this rule, so it is worth asking your administrator rather than assuming either way.
Which year's wages does this use?
The previous year's. Your 2025 wages decide how your 2026 catch-up is treated, so a raise this year does not change this year's answer, and a drop in income does not rescue it. The test is run again every year, against the year before.
Which wages count? My salary, or something else?
Social Security wages, which is Box 3 of your W-2, from the employer that sponsors the plan. That is not the same as your salary. Box 3 stops at the Social Security wage base, so anyone earning well above it has a Box 3 figure lower than their pay. It is also not Box 1: pre-tax deferrals reduce Box 1 but not Box 3. Reading the wrong box is the most common way to get a confident wrong answer here.
I changed jobs. Does my old salary count?
No. The test looks only at wages from the employer sponsoring the plan you are contributing to. Someone who earned a great deal last year and started somewhere new is generally outside the rule in their first year with the new plan, because the new employer paid them nothing in the prior year. It applies again once a full prior year of wages has built up.
Does this apply to my IRA or my SEP?
No. The rule reaches workplace plans such as 401(k), 403(b) and governmental 457(b) plans. SEP plans and SIMPLE IRAs are excluded by statute, whatever the participant earned. A SIMPLE 401(k) is a different matter and is not excluded, which is worth checking, because both are usually described as a SIMPLE plan and the answer is not the same.
Am I worse off if my catch-up has to be Roth?
Not necessarily, and the calculator only shows one side of it. What you lose is a deduction this year, which is the figure shown. What you gain is that the money and everything it earns comes out untaxed later, and that it is not subject to required minimum distributions in the same way. Whether that trade is good for you depends on your rate now against your rate in retirement, which is a judgement rather than a calculation.
Can I contribute less to avoid this?
The rule applies to catch-up contributions specifically, so contributing only up to the ordinary deferral limit keeps you out of it. That is a real option, and it is also a smaller retirement contribution. This calculator prices the cost of the Roth treatment so that the comparison is against a number rather than a feeling.
Where does what I type go?
Nowhere. The whole calculation runs in your browser. The figures are encoded into the address bar so a scenario can be shared or bookmarked, and they are encoded rather than written in plain text so a copied link does not spell out your wages in server logs along the way.

Related