At 63 She Took a Job Paying Over $150,000. The Catch-Up Rule Checked a Paycheck That Didn’t Exist.

The 2026 Roth catch-up rule checks prior-year FICA wages from the current employer only, so new hires effectively show zero and may contribute pre-tax.

At 63, she can contribute up to $35,750 to her 401(k) in 2026, making the pre-tax versus Roth distinction especially valuable during a high-earning year.

Pre-tax 401(k) deferrals don't reduce Social Security wages, so the earnings test could still withhold up to $62,760 in benefits if she claimed at 62.

At 63, a woman leaves a long career at a nonprofit and starts a genuinely new job at a private company. The role pays slightly more than $150,000, and the company offers a 401(k). She has read about the new Roth catch-up rule and expects her age-based contribution to be forced into a Roth account. That would mean losing the upfront deduction she wanted during one of her final high-earning years.

Her new 401(k) looks backward and sees something unexpected: zero. Social Security looks at the year unfolding and reaches the opposite conclusion.

Why Her New Employer Sees No Prior Wages

Beginning in 2026, workers whose prior-year FICA wages exceeded $150,000 generally must make age-based catch-up contributions on a Roth basis. The key phrase is not simply "prior-year wages." It is prior-year FICA wages from the employer sponsoring the current plan.

This woman did not work for the private company in 2025. Her W-2 wages from that employer were zero, even if she earned more than $150,000 at the nonprofit. For purposes of the new company's Roth catch-up test, the relevant paycheck does not exist. That means she may still be allowed to make her 2026 catch-up contribution on a pre-tax basis if the plan offers that option. Her current salary does not control the first-year result. The rule looks backward. It also looks at the employer, not merely the employee.

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The standard employee contribution limit for most 401(k) plans is $24,500 in 2026. Workers 50 and older ordinarily receive an $8,000 catch-up. A special rule raises the catch-up limit to $11,250 for employees who turn 60, 61, 62 or 63 during the year. At 63, she could potentially contribute as much as $35,750 between the standard deferral and the larger catch-up.