Mesirow's Gary Pattengale Urges 2026 Tax Planning in September on WGN

Q: Will the mandatory 2026 Roth catch-up rule for high earners secretly inflate your tax bill this December?

Yes—if you are 50 or older, earned more than $150,000 in 2025 FICA wages from your employer, and make 401(k) catch-up contributions in 2026, the new Roth-only rule can raise your tax bill by year-end because those catch-up dollars are no longer pre-tax. The change is not a hidden surtax. It is a shift in timing. Under SECURE 2.0, affected workers must put catch-up contributions into a Roth account, meaning the money is taxed now rather than deducted from 2026 income. Regular 401(k) deferrals up to the base 2026 limit of $24,500 can still generally be pre-tax; the Roth mandate applies only to the catch-up portion. That can show up as more tax withheld from paychecks through the fall and, if withholding or estimates are too low, a bigger amount due when filing. For 2026, the catch-up is $8,000 for most workers 50+ and $11,250 for those ages 60 to 63. In a 24% federal bracket, losing the upfront deduction on an $8,000 catch-up means roughly $1,920 more federal taxable income; on $11,250, about $2,700. State taxes may add more. Gary Pattengale’s advice to review 401(k) contributions in September is especially relevant here. High earners should check payroll elections, confirm whether their plan has a Roth feature, and model the year-end impact now. The tradeoff is that while the immediate deduction disappears, future qualified Roth withdrawals are generally tax-free.

Q: Are you missing out on the massive new retirement loophole exclusively available to those aged 60 to 63?

Yes—if you are 60 to 63 and your employer plan allows it, you may be missing a larger 401(k) catch-up that significantly raises how much you can shelter for retirement in 2026. Under the 2026 IRS limits, the standard 401(k) deferral is $24,500. Workers age 50 and older can usually add an $8,000 catch-up, for a total of $32,500. But people who are 60, 61, 62 or 63 by the end of 2026 qualify for an enhanced catch-up of $11,250 instead, lifting the total to $35,750. That extra $3,250 is the new age-specific opening many savers may overlook. This is the “massive new retirement loophole” often being referenced, though it is not a loophole in the traditional sense. It is a SECURE 2.0 rule change designed to help late-career workers accelerate savings. Similar age-60-to-63 boosts also apply to some SIMPLE plans. There are important limits. Your plan must actually offer catch-up contributions and adopt the enhanced provision. Starting in 2026, if your 2025 FICA wages from that employer exceeded $150,000 and the plan has a Roth feature, your catch-up contributions generally must be made on a Roth, after-tax basis rather than pre-tax. Gary Pattengale of Mesirow said September is a smart time to review year-end tax planning, including 401(k) contribution levels. For anyone in this age band, checking payroll elections now may be the difference between using the full $35,750 limit and leaving tax-advantaged retirement space unused.

1 articles · Updated · AOL · Sep 15

September is the best window for 2026 tax planning, Gary Pattengale said on WGN, urging families and investors to act before year-end while tax outcomes can still be influenced.
New 2026 charitable deduction rules and higher SALT deduction limits were central themes, though Pattengale said income-based phaseouts could curb benefits for higher earners and make advance modeling important.
Inherited IRA rules for non-spouse beneficiaries also require attention, he said, with withdrawal strategies needing to fit longer-term tax goals rather than year-end decisions alone.
401(k) catch-up contributions and 529 plan reimbursements rounded out the checklist, with Pattengale reminding savers that qualified education expenses must be reimbursed in the same calendar year.