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A new rule means some 401(k) contributions will no longer be tax-deferred. Here’s who will be affected
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Staring next year, the highest-earning 401(k) participants who are eligible to make "catch-up" contributions will no longer be able to defer taxes on those contributions.
- FreshSplash/E+/Getty ImagesA new rule is going into effect next year that will affect high earners who make “catch-up contributions” in their 401(k)s or other tax-deferred workplace retirement plans.
Until now, you could choose for all of your 401(k) contributions to be made tax-deferred.
In other words, they will be treated as Roth 401(k) contributions.
But for those high earners who are affected by the rule change, there are potential upsides and downsides.