Retirement Savings: Unlock Hidden 401k Rule!

12 Oct 2026 · 2 min

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1:49

In this 2026‑focused video, Louis Barajas explains a little‑known 401(k) provision that benefits workers aged 60‑63. He outlines the standard 2026 contribution limit of $24,500, the regular catch‑up allowance for those 50+, and the new extra $11,250 “big‑catch‑up” that lets eligible individuals contribute up to $35,750 in a single year. He then details a second rule: if a high‑income employee earned more than $150,000 from the same employer, any catch‑up contributions must be placed in the Roth side of the plan (assuming the plan permits it), meaning no immediate tax deduction but tax‑free qualified withdrawals later. Barajas cautions viewers to weigh cash flow, tax situation, debt, and overall retirement strategy before maxing out contributions, emphasizing that late‑career earners can still make a meaningful final savings push. The tone is conversational and motivational, with a supportive yet realistic sentiment toward late‑stage retirement planning.

Chapters

Now, if you're between the ages of 60 and 63 and you're worried that you haven't saved enough for retirement, listen to this because there's a special 401 rule that a lot of people don't know about. Now, in 2026, most employees can contribute up to $24,500 to their 401. Now, if you're 50 or older, you normally get an additional catch-up provision. Most of you know about this, right? But if you're 60, 61, 62, or 63, you now get an even bigger opportunity. You can contribute an additional $11,250. Which means that you could potentially put up to $35,750 into your 401 this year. And if you're married and your spouse qualifies and has their own 401, well, think about what the two of you could potentially put away. But there's another change you need to know about, especially if you're a high-income employee, because in 2026, if your prior wages from that employer were more than $150,000 a year, Your catch-up contributions generally have to be made into the Roth side of your 401, and that's if your plan allows catch-up contributions. Now, that means you don't get the tax deduction today on that catch-up money, but qualified Roth withdrawals can come out tax-free later. So now, don't just blindly put more money into your 401 because you heard me say this. You still have to look at your cash flow, your taxes, your debt, your retirement plan, and what makes sense for you. But here's my point. I meet people in their 60s who tell me, Louis, I'm behind. It's too late. No, it may be late, but late and too late are 2 very different things. These may be some of the highest earning years of your life. So instead of spending everything you make because retirement is getting closer, maybe these are the years you make the final big push. Remember, you still have time. Just use it wisely.