The Power of Catch-up Contributions

How much are you contributing to your workplace retirement plan each year? The maximum contribution that you can make in 2026 is $24,500 if you’re 49 or younger. However, if you’re 50 or older, you have an opportunity to contribute an additional $8,000 in 2026 via a catch-up contribution.

Additionally, individuals who are turning 60, 61, 62, or 63 in 2026 are eligible to save beyond that $32,500 limit ($24,500 + $8,000 catch-up) in 2026. Instead of being limited to the $8,000 catch-up contributions, these individuals can make a “super catch-up contribution” of up to $11,250. This opportunity to make super catch-up contributions began in 2025 as a provision of the SECURE Act 2.0.

If you feel like you’re behind the 8 ball with saving for retirement, catch-up and super catch-up contributions offer potential solutions to accelerate your savings. We’re going to illustrate the difference that annual catch-up and super catch-up contributions can make for your retirement plan.

Maxing Out 401(k) Contributions

For this case study, we aim to illustrate how much your potential savings you could create by maxing out 401(k) contributions and making catch-up contributions over 15-year period. In this scenario, we’re assuming an 8% annual rate of return. Figure 1, below, shows the impact of catch-up and super catch-up contributions over time for an individual starting at 50 with $500,000 saved in their 401(k) plan. By age 65, maximum catch-up and super catch-up contributions would help this individual save an extra $276,346 for retirement.

FIGURE 1 – Maxing Out 401(k) Contributions with Catch-up and Super Catch-up Contributions

Catch-up Contributions Must Go to Roth Accounts Beginning in 2026

Another important note regarding catch-up and super catch-up contributions is that starting in 2026, they must go to Roth accounts if your FICA wages were more than $150,000 in 2025. That was another provision of the SECURE Act 2.0.

Maxing Out IRA and Roth IRA Contributions

The long-term impact isn’t as substantial, but let’s quickly review IRA and Roth IRA contribution limits for 2026 as well. The maximum contribution is $7,500 if you’re 49 or younger. If you’re 50 or older, you can make a $1,100 catch-up contribution for a total contribution of $8,600. It’s important to note that there are income limits to contribute to a Roth IRA and deduction limits for traditional IRAs.

Roth IRA Income Limits

To contribute to a Roth IRA in 2026, your Modified Adjusted Gross Income must be below $252,000 if you’re married and filing jointly. You’re still eligible to make a partial contribution if your MAGI is between $242,000-$252,000. That phase-out range is $153,000-$168,000 if you’re a single filer.

Traditional IRA Deduction Limits

The traditional IRA deduction limits will depend on if you and your partner have workplace retirement plans. There aren’t income limits that apply for single filers who don’t have a workplace retirement plan. Also, there aren’t income limits for married individuals if they and their spouse don’t have a workplace retirement plan.

Let’s say that you want to make a contribution in 2026 but don’t have coverage from a workplace retirement plan. If your partner still has coverage, you can still make a full contribution if your income is less than $242,000 ($252,000 for a partial contribution).

If you’re a single filer with a workplace retirement plan, your phase-out range will be $81,000-$91,000. If you’re married and filing joint, you can make a full contribution if your income is less than $129,000 and your partner has coverage. You can still make a partial contribution if your income is less than $149,000.

Should You Make These Catch-up Contributions?

If you’re worried about not having enough money to get to and through retirement, make sure you’re taking advantage of catch-up and super catch-up contributions if you’re eligible. But before you do that, do you know how much you need to save for retirement?

Some people struggle with knowing when it’s OK to stop saving for retirement and to start spending more. Could you already be saving too much for retirement (therefore not needing to make catch-up contributions) and not even know it?

What’s the point of diligently saving throughout your career if you’re not going to live the life you want to live in retirement? That’s why it’s crucial to work with a team of professionals that could help you with building a financial plan that’s tailored to your financial and life goals.

It’s important to understand that financial planning is a series of trade-offs. How will you navigate decisions such as whether to save more for retirement or to take a family vacation? We shed some light on various retirement planning considerations in our Retirement Plan Checklist. It consists of 30 yes-or-no questions that gauge your retirement readiness and age-and date-based retirement planning timelines.

Retirement Plan Checklist

We’re Here to Help with Making Those Tough Decisions

Trying to determine what’s in your best interest during those series of financial planning trade-offs isn’t always easy to do on your own. So many things—including the ability to make catch-up contributions—can be overlooked during the retirement planning process.

Our team is ready to help you with attempting to navigate those scenarios so that you can enjoy life today while building confidence for tomorrow. If you have questions about catch-up contributions or other retirement planning strategies, start a conversation with our team below.

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The views expressed represent the opinion of Modern Wealth Management a Registered Investment Advisor. Information provided is for illustrative purposes only and does not constitute investment, tax, or legal advice. Modern Wealth Management does not accept any liability for the use of the information discussed. Consult with a qualified financial, legal, or tax professional prior to taking any action.