New Federal Retirement Law Impacts 401(k) Contributions

Certain workers must now make 'catch-up' contributions as Roth, not pre-tax

Apr. 5, 2026 at 7:01am

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A change in federal retirement law is now in effect, requiring some workers to make their 401(k) 'catch-up' contributions as Roth contributions rather than traditional pre-tax contributions. This new rule applies to certain employees as they approach retirement age.

Why it matters

The shift from pre-tax to Roth contributions can have significant tax implications for workers nearing retirement, as it affects how their retirement savings are taxed in the future. This change aims to encourage more Roth savings, but may create challenges for some employees' retirement planning.

The details

The new law mandates that workers aged 50 and older must make their 401(k) 'catch-up' contributions, which allow for additional yearly savings beyond the normal contribution limits, as Roth contributions rather than traditional pre-tax contributions. This means the catch-up funds will be taxed upfront but can then be withdrawn tax-free in retirement.

  • The new federal retirement law went into effect on April 1, 2026.

The players

Mark R. Morley

A financial advisor who specializes in retirement planning and has been following the changes to federal retirement laws.

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What they’re saying

“This new rule will have a big impact on how people plan for their retirement, especially those nearing that stage of life.”

— Mark R. Morley, Financial Advisor

What’s next

Employees affected by the new law should consult with a financial advisor to understand the tax implications and adjust their retirement savings strategies accordingly.

The takeaway

The shift from pre-tax to Roth 401(k) catch-up contributions is a significant change in federal retirement policy that will require careful planning by workers nearing retirement age to optimize their tax situation.