Retirement Retirement Planning

Turning 60 in 2026? 7 Things You Need to Know About Your 401(k)

2026 brings higher contribution limits and tax changes to 401(k)s.

By Catherine Collins

Edited by Catherine Collins

Updated Dec. 24, 2025

Turning 60 is a major milestone, especially when it comes to your 401(k) retirement plan. In 2026, there will be several changes to 401(k)s, including new contribution limits and tax changes for high earners. Understanding these changes can help you prepare more as your retirement gets closer.

Here are several of the most important 401(k) rules you need to know about as we enter the new year. Plus, we'll share information on withdrawal planning, retirement strategies, and how to weather economic downturns as you get towards the end of your working career.

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Your 401(k) contribution limits are higher

In 2026, the IRS increased the contribution limit to $24,500. This is an increase of $1,000 from 2025. Employees who are 60 years old also qualify for an even larger catch-up contribution. This amount is $11,250. Although the enhanced catch-up contribution hasn't increased since last year, it still brings the total amount you can contribute to your 401(k) to $35,750. This super catch-up window is only available to people aged 60-63. It's designed to help people aggressively top up their retirement savings before leaving the workforce.

Tax changes for high earners

The most significant change to 401(k)s in 2026 affects high-income employees earning $145,000 or more per year. In previous years, these employees could make catch-up contributions on a traditional pre-tax basis. However, starting in 2026, these high earners must categorize their catch-up contributions as a Roth 401(k) instead. This will be a drawback for employees who used 401(k) contributions as a way to reduce their taxable income. However, the benefit is that, later in retirement, Roth withdrawals can be made tax-free, provided employees meet specific qualifications.

Understand your investment allocation

If you're turning 60 in 2026, another important thing to consider is your investment allocation. Many people choose their funds early in their careers and rarely review or adjust their investment choices.

Turning 60 means protecting your accumulated investments is even more critical, as your retirement is drawing nearer. Turning 60 is also when many financial planners recommend shifting to more conservative investments. After all, no one can predict the market. A severe market downturn in the last few years of your career can negatively impact your retirement savings.

Learn how withdrawals work

Not many employees understand how retirement withdrawals work or best practices, but turning 60 means it's a good time to consider what your strategic withdrawal plan will be during retirement. If you need help, work with a financial planner and a tax advisor to develop a plan that works with your personal goals and projected retirement income.

For some people, making these retirement withdrawals will help them begin their retirement years. For others, they may choose to delay withdrawals until the required distribution age of 73. Ultimately, now is the time to decide which path is best for you as you approach retirement age.

How 401(k)s work with Social Security

One of the final steps in the retirement puzzle is to learn how your 401(k) works in partnership with Social Security income. You can start claiming Social Security as early as age 62. However, you'll receive a smaller monthly Social Security benefit at age 62 than you would by delaying until full retirement age.

Those who delay claiming Social Security until age 70 can enjoy a much higher monthly benefit. Deciding the right age to take Social Security and how to coordinate that with your 401(k) withdrawals will be an important part of retirement planning now that you're in your 60s.

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Employers might have administrative hurdles

Another important thing to know is that whenever there are changes to 401(k) plans, employers may face administrative hurdles. They may not automatically implement every rule. Some employees might have to wait for their employer to make changes.

There are also many different 401(k) plan providers. These providers have varying levels of customer service and support. You might need to be patient or check in with your employer regularly to ensure your changes take effect and that you are following current IRS guidelines.

Where to find answers to your 401(k) questions

If you have additional questions about your 401(k), the best place to get answers is your company's Human Resources department. It's also a good idea to get the advice of an outside professional, such as a Certified Financial Planner or a tax specialist. Sometimes, a tax advisor and financial planner can work together to help you design the best strategy for your retirement years.

Bottom line

Your 60s are an important time to finalize your retirement investments. Turning age 60 allows you to make super catch-up contributions. However, it can be overwhelming because you might have to make several complex retirement decisions over the next few years. Remember, just because the IRS created a new rule does not mean that your employer will adopt it right away.

Being proactive, reviewing your plan early, and seeking professional advice are the best ways to guarantee that you'll be able to retire comfortably in the future.

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