Starting in 2026, high-income earners over 50 face a new income test for catch-up contributions to their 401(k) plans. Those earning over $145,000 from their current employer may only contribute to a Roth 401(k), adding an upfront tax burden for many. Nearly 1 in 5 people aged 45-54 earn over $100,000 annually, impacting millions (1,2).

The IRS announced new regulations changing catch-up contributions in 2026. Workers over 50 can contribute up to $23,500 to 401(k) plans, but those earning over $145,000 from their current employer may only contribute to Roth 401(k) plans. This change affects tax deductions and adds complexity to retirement planning (3,4).

To navigate these changes, workers should consult with their employers about Roth 401(k) options. For personalized financial advice, reaching out to a financial advisor, planner, or tax lawyer may be beneficial. Understanding how these rules affect retirement savings is crucial for high-income earners (5,6).

For those looking to maximize retirement savings, exploring alternative investment options like commercial real estate can be beneficial. First National Realty Partners (FNRP) offers accredited investors the chance to diversify portfolios through grocery-anchored properties. With triple net leases and depreciation expenses, investors can reduce tax burdens (7,8).

In light of these changes, updating retirement plans to reflect the new tax burden is essential. Investing in commercial real estate can provide tax benefits through depreciation expenses. FNRP offers accredited investors the opportunity to own shares in properties leased by national brands, diversifying portfolios without landlord responsibilities (9,10).

Read more at Yahoo Finance: A new 401(k) rule is coming in 2026 for millions of high-earning Americans. What to know if you’re in this group