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If you're middle-aged and in a high-income bracket, the way you contribute to your 401(k) will change as of next year.

This September, the Internal Revenue Service (IRS) announced new regulations changing the way catch-up contributions work starting in 2026. Specifically, the IRS has introduced a new income test for taxpayers looking to contribute to particular retirement accounts, and it could hit high earners hard.

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Here's what you need to know.

Make $145K or more? You have fewer ways to save

In 2025, all workers can contribute up to $23,500 into 401(k) plans. However, workers over the age of 50 can make catch-up contributions to save more in these tax-advantaged accounts as they approach retirement.

Typically, workers have the choice to invest catch-up funds in either a regular 401(k) plan or a Roth 401(k) plan.

But as of 2026, workers in this age group will face a new income test. If you earned over $145,000 in the previous year from your current employer, your catch-up contributions may only be made to a Roth 401(k) plan.

The difference between a standard 401(k) and a Roth 401(k) is the tax treatment. Workers can contribute pre-tax income to a standard 401(k), which allows them to claim contributions as a deduction on their tax returns. A Roth 401(k), meanwhile, is designed for after-tax income, which means you do not enjoy the tax deduction on contributions.

Put simply, this new rule adds an upfront tax burden for high-income earners (1).

This seemingly small change can have big consequences for many workers. Just under one in five people between the ages of 45 and 54 earn over $100,000 a year, according to YouGov, so millions of people could be impacted by this new rule (2).

Read more: Warren Buffett used 8 solid, repeatable money rules to turn $9,800 into a $150B fortune. Start using them today to get rich (and stay rich)

What can you do?

If you believe this rule change might impact you, the first step is to reach out to your employer and ask if they offer a Roth 401(k) plan for employees.

Nearly 93% of employers offer a Roth 401(k) plan, according to the Plan Sponsor Council of America, but there is a chance your employer is part of the remaining 7% (3).

It's also important to note that the $145,000 income test applies to each employer. That means if you started working for a new employer recently, only the aggregate income you earned from this new employer counts towards the test. If you work for multiple employers, your income won't be added together, unless you meet very specific criteria, such as if your employers are controlled by the same parent company, according to Groom Law Group (4).

Put simply, multiple layers of complexity have been added to the catch-up contributions you can make to these tax-sheltered accounts.

Finding professional advice for tax time

This could be a good time to reach out to your financial adviser, certified financial planner or tax lawyer to see how these new rules impact you.

If you don't have a financial advisor, or you want to assess the market, you could try working with Advisor. To find qualified financial advisors near you in just minutes.

All you need to do is enter some basic information, such as your ZIP code, and Advisor will match you with local fiduciaries that could help you meet your financial needs. From here, you can then book a free call with no obligation to hire to make sure they're the right fit.

Handling the changes as a high earner

If you're making well over six figures, then your financial goals and needs may be somewhat unique - especially with this new tax burden. If you're looking to get a handle on these changes and take better advantage of a Roth account, you'll want to work with financial experts who understand a high-income household.

This is where Range can come in, as they offer white-glove financial services to households in higher income brackets.

Once your equity enters this ballpark, one big financial pain point - other than taxes - can be asset under management (AUM) fees. This is where portfolio managers take a percentage of the value, typically between 0.5% and 2%, of your managed assets as a charge.

In other words, their fees scale with your wealth. This is one area where Range differs. Range offers 0% AUM fees for advisory services and a flat-fee structure so that you can make the most of your money.

For those concerned about maximizing their retirement, Range also provides expert guidance on navigating the complexities of tax strategies, such as backdoor Roth IRA contributions. Even better, you can book a complimentary demo to see if Range can meet your expectations as a high earner, whether you're trying to maximize your retirement savings or reassess your real estate portfolio.

Investing in real estate as an IRA alternative

If your retirement plan included aggressive catch-up contributions, this could also be a good time to update those plans to reflect the upfront tax burden you may have to face starting next year. That said, there may be other ways to reap tax benefits outside of an IRA – such as by investing in commercial real estate.

Tax rules allow a commercial property owner to depreciate the value of a property by a small amount every year, then list this amount as an expense on the property's income statement. This can result in significant tax savings over time.

But historically, direct access to this $22.5 trillion commercial real estate sector has been limited to a select group of elite investors.

That's where First National Realty Partners (FNRP) comes in. FNRP helps accredited investors diversify their portfolios through grocery-anchored commercial properties, without taking on the responsibilities of being a landlord.

With a minimum investment of $50,000, accredited investors can own a share of properties leased by national brands like Whole Foods, Kroger and Walmart, which provide essential goods to their communities. Thanks to triple net leases, accredited investors are able to invest in these properties without worrying about tenant costs cutting into their potential returns. Investors can also rest easy knowing they can leverage depreciation expenses to decrease their tax burden.

Simply answer a few questions - including how much you would like to invest - to start browsing their full list of available properties.

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Article sources

We rely only on vetted sources and credible third-party reporting. For details, see our editorial ethics and guidelines.

CNBC (1 ); YouGov (2 ); Groom Law Group (3 )

This article provides information only and should not be construed as advice. It is provided without warranty of any kind.

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