With a new tax season underway, it's always a good idea to review key tax laws for major changes before you begin your tax preparation. With passage of the One Big Beautiful Bill Act (OBBBA) and provisions of the SECURE 2.0 Act being enacted in 2026, there are some notable changes to be aware of if you have a Roth 401(k) retirement plan.
These changes could affect your tax return and how you (and your employer) contribute to your account in the future, so it's important to stay informed.
Why Are These Changes Taking Place?
You may have already heard about many new tax changes taking place beginning in 2026—with the majority being in some way tied back to OBBBA. However, updates to Roth 401(k) plans actually have less to do with OBBBA and more to do with provisions of the SECURE 2.0 Act, which was signed into law back in 2022 and was designed to help Americans save more for retirement.
Many of the provisions of the SECURE 2.0 Act, including changes to Roth 401(k) rules, weren't designed to go into effect in 2026. Now that we've reached that point, many taxpayers will need to revisit their own tax and retirement savings situations to ensure they're complying with new rules.
What's New with Roth 401(k) Plans, Anyway?
If you have a Roth 401(k) or have the option to open one in 2026, here are the most notable changes you should be aware of.
Changes to Catch-Up Contributions
For starters, the rules related to catch-up contributions with these retirement accounts are changing. Beginning this year, these contributions must be made as after-tax contributions (for those exceeding certain income thresholds) rather than pretax ones. Meanwhile, those earning less than the annual maximum (which is $150,000 for single filers) have the option to make their catch-up contributions traditionally—provided that they meet basic qualifications for making catch-up contributions (such as being age 50 or older).
No More Required Minimum Withdrawals
Another major change going into effect for Roth 401(k) account holders in 2026 is that required minimum distributions (RMD) have been eliminated under the SECURE 2.0 Act.
Previously, RMDs were required once account holders reached a certain age. Under new rules, however, account holders can keep the funds in their accounts for longer, allowing them to continue earning interest tax-free.
Higher Contribution Limits
Overall contribution limits for Roth 401(k) accounts are changing to keep up with inflation and the rising cost of living. For 2026, for example, employees under the age of 50 are allowed to contribute up to $24,5000 to a Roth 401(k) per year. For those over the age of 50, that limit increases to $32,500 when you factor in an additional $8,000 for catch-up contributions.
Employees ages 60-63 may even qualify for a “super” catch-up contribution of $11,250, which increases total contribution limits for the year to $35,750.
New Employer-Matching Options
In previous years, any employer-matching to a Roth 401(k) had to be made into a pretax account. However, under the new provisions of the SECURE 2.0 Act, employers are now able to make direct Roth matches, if they so choose. If your employer decides to go this route, however, it is important to note that you will receive a 1099-R, and the contributions will be taxed as regular income on your return.
What This Could Mean for You
With these changes going into effect for the 2025 tax year, now is the time to review your own retirement-savings situation and make any necessary changes to how you'll prepare for tax season. This may include reevaluating your own contribution strategy and amounts—especially if you may now be eligible for higher contribution limits or catch-up contributions.
Start Planning Ahead Now
For many employees, a Roth 401(k) is a great retirement savings option because it allows for tax-free qualified withdrawals down the road and comes with relatively high annual contribution limits. However, with new rules in place, now is a good time to review whether this type of retirement account is still the best choice for your needs.
Regardless, meeting with an experienced financial advisor or tax consultant can be a great way to get answers to any questions you may have about choosing a retirement account, maximizing your tax savings, or saving for retirement in general.
If you have any questions about the updated Roth 401(k) rules or would like more information about retirement planning, please contact us.