Where Your Catch-up Money Goes When the Plan Has No Roth

Hayden Adams at Charles Schwab put it plain:

Not half. Not prorated. The whole thing.

And if your plan doesn't have a Roth account? The money doesn't go anywhere. It just stops.

Starting January 1, 2026, anyone who earned more than $150,000 in FICA wages the prior year must make all catch-up contributions as Roth. That's the new law. SECURE 2.0, Section 603. Congress passed it in 2022. The IRS delayed enforcement twice and finalized the rules in September 2025. Now the clock is running.

If you're 50 or older, the catch-up limit for 2026 is $8,000. That's on top of the regular $24,500 you're already putting in. Real money. Money you've been setting aside for years.

If you're 60 to 63, the number jumps to $11,250 — replacing the $8,000, not stacked on top. Even more real.

Now all of it has a new condition.

Here's where the pipe breaks. Fidelity says it flat:

Read that again. The catch-up didn't move to another pocket. It fell through the floor. No Roth option in the plan means no catch-up at all for high earners. No opt-out. No workaround. The door you walked through for years is locked.

I mean, sure, most large employers already offer Roth. One industry survey of plans says 95.6% had it by end of 2024. But that survey doesn't capture solo 401(k)s or micro-plans. Vanguard's numbers show 86% — same blind spot. Neither one sees the solo 401(k) at the dentist's office. Or the small trucking company with twelve guys. The gap is widest at the smallest plans. Right where the owner runs the show.

The $150,000 test doesn't use your adjusted gross income. It uses FICA wages. Box 3 on your W-2. From the specific employer sponsoring the plan.

Why does that matter? Because things show up in Box 3 that you don't think of as "salary." RSU vests. Bonuses. Overtime. Your offer letter says $140,000. Your W-2 says $155,000 because a chunk of stock vested in November. You didn't get a raise. You got pushed over a line you didn't know existed.

And the $150,000 number itself was a surprise. The law said $145,000. Everyone prepped at $145,000. Then in November 2025, the IRS bumped it to $150,000 after plans had already started building their compliance systems. Helpful.

Look. If you're a W-2 employee at a big company, this is probably just a phone call to HR. Your plan almost certainly has Roth. You switch. You lose the upfront deduction. You grumble. Life goes on.

But if you're a small business owner? You set up a solo 401(k) ten years ago. You picked the simple version. No Roth. It was less paperwork. Now you earn over $150,000 from your own company. You are the plan sponsor. You are the participant who just got locked out.

You designed the jail. You're sitting in it.

The plan amendment deadline is December 31, 2026. The IRS gave a good-faith compliance window for this year. But the operational requirement started January 1. Every paycheck you've already cut is a question mark. Did you withhold catch-ups pre-tax for a high earner? That's a correction waiting to happen.

The door isn't bricked over. It's locked. The key is a plan amendment. A form. A call to your third-party administrator. Add Roth to the plan. The catch-up comes back.

But you have to know the lock exists. And that's the part nobody put in the headline. Every article you've read about this rule talks about losing the tax deduction. The real story is simpler. Some of you lost the contribution itself. Not the tax break on the money. The money.

One dollar over the line. The whole catch-up gone.

Sure.