Should higher earners still make 401(k) catch‑up contributions?

Core Insights - Retirement savers aged 50 and over can make "catch-up" contributions to their 401(k) plans, which will increase from $7,500 in 2025 to $8,000 in 2026 [1][5] - Contributions to tax-deferred retirement plans lower adjusted gross income, providing tax benefits; for example, a 50-year-old contributing $31,000 could save $7,440 in taxes at a 24% tax bracket [2] - Starting January 1, 2026, high earners (over $145,000) can only make catch-up contributions to a Roth 401(k), which are taxed upfront, making them less attractive [3][4] Group 1: Catch-Up Contributions - Catch-up contributions allow individuals to contribute additional amounts to their retirement savings, with potential total contributions exceeding $120,000 from age 50 to 65 [5] - Individuals aged 60 to 63 can contribute up to $11,250 per year as a "super catch-up," subject to the same income restrictions as regular catch-up contributions [5] Group 2: Tax Implications - Contributions to a Roth 401(k) do not reduce adjusted gross income, leading to higher taxes; for example, a higher-earning individual could pay about $1,920 more in taxes if contributing to a Roth instead of a traditional 401(k) [4] - Funds in a Roth 401(k) may not be eligible for employer matching contributions, although recent changes under Secure 2.0 have relaxed some restrictions [7]