Should Higher Earners Still Make 401(k) Catchup Contributions?

No more tax break on catch-up contributions for some earners—but the strategy may still pay off. Andrey_Popov/ShutterstockSince 2002, retirement savers age 50 and over have had the option of making “catch-up” contributions to their 401(k) plans, which stack on top of the regular limits for employee contributions to tax-deferred retirement plans. The amounts were limited to $1,000 per year when they first came out but expanded to $7,500 by 2025.In addition, contributions to tax-deferred retirement plans are excluded from adjusted gross income, resulting in a lower tax bill on income that would otherwise be taxed. For example, a 50-year-old employee who contributed the $23,500 maximum to her retirement plan in 2025 plus the $7,500 catch-up amount would have effectively shielded $31,000 from current-year taxes, resulting in a tax break of $7,440 for someone in the 24 percent tax bracket. New for 2026: One Tax Break Goes Away With SECURE 2.0But starting this year, these tax breaks will be off-limits for some retirement savers. That’s because of a new provision from  SECURE 2.0 that went into effect on Jan. 1, 2026. (SECURE refers to Setting Every Community Up for Retirement Enhancement.)