IRS overhauls 2026 retirement rules with Roth catch-up mandates and higher limits
Starting in 2026, workers with incomes over $150,000 in 2025 will face a new requirement: catch-up contributions must go into a Roth account. This change targets high earners looking to boost their retirement savings. The IRS has announced higher contribution limits for 401(k)s, 403(b)s, Thrift Savings Plans, and government 457 plans to $24,500. Those aged 50 and older can add an extra $8,000 in catch-up contributions, increasing their total savings potential. A separate measure, the 'One Big Beautiful Bill,' offers a temporary tax deduction for seniors. Americans aged 65 and older can claim an additional $6,000 deduction through 2028. However, this benefit only applies to individuals earning under $75,000 or married couples with incomes below $150,000. Meanwhile, the Federal Reserve is expected to cut interest rates in 2026. If this happens, returns on traditional savings accounts and fixed-income investments could drop, pushing more people toward retirement plans with tax advantages. The 2026 updates aim to adjust retirement savings rules while providing targeted tax relief for seniors. Higher contribution limits and Roth requirements will reshape how workers save, while potential rate cuts may change investment strategies. These measures will take effect regardless of any unrelated claims about new tax laws for seniors.
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