What are the key takeaways from this The Money Guy Show episode?

Key insights include: **2026 Contribution Limits:** The standard 401(k) deferral rises to $24,500 in 2026, up from $23,500. Workers aged 50–59 and 64+ get an $8,000 catch-up. Workers aged 60–63 qualify for a "super catch-up" of $11,250 on top of the base limit — the single largest annual contribution window available in employer-sponsored plans.; **High-Earner Catch-Up Rule Change:** Workers earning above $145,000 in FICA wages who are 50 or older must now direct all catch-up contributions into Roth accounts — no pretax deduction allowed. A $200,000 earner who previously reduced taxable income to $169,000 will now see taxable income rise to roughly $175,500 under 2026 rules.; **Compounding Math by Starting Age:** A 20-year-old saving $95 per month reaches $1 million by 65, with only $51,000 contributed personally. At 30, 89% of the million comes from growth. At 40, still 77%. Adding a dollar-for-dollar employer match cuts required personal contributions roughly in half, pushing growth-plus-match to 97% of the final balance for a 20-year-old.

How long is this episode of The Money Guy Show?

This episode is 31 minutes long. SignalCast provides an AI-generated summary so you can get the key insights in about 3 minutes.

The Money Guy Show

3 Big 401(k) Updates That Could Impact Your Future

February 27, 2026

31 min episode · 2 min read

Episode

31 min

Read time

2 min

Topics

Relationships, Investing, Fundraising & VC

AI-Generated Summary

Published Feb 28, 2026

Key Takeaways

✓2026 Contribution Limits: The standard 401(k) deferral rises to $24,500 in 2026, up from $23,500. Workers aged 50–59 and 64+ get an $8,000 catch-up. Workers aged 60–63 qualify for a "super catch-up" of $11,250 on top of the base limit — the single largest annual contribution window available in employer-sponsored plans.
✓High-Earner Catch-Up Rule Change: Workers earning above $145,000 in FICA wages who are 50 or older must now direct all catch-up contributions into Roth accounts — no pretax deduction allowed. A $200,000 earner who previously reduced taxable income to $169,000 will now see taxable income rise to roughly $175,500 under 2026 rules.
✓Compounding Math by Starting Age: A 20-year-old saving $95 per month reaches $1 million by 65, with only $51,000 contributed personally. At 30, 89% of the million comes from growth. At 40, still 77%. Adding a dollar-for-dollar employer match cuts required personal contributions roughly in half, pushing growth-plus-match to 97% of the final balance for a 20-year-old.
✓401(k) Rollover Decision on Job Change: 41% of Americans cash out at least part of their 401(k) when leaving a job, and 85% of those take the full balance — triggering ordinary income tax plus a 10% early withdrawal penalty. Three penalty-free alternatives exist: roll into a new employer's 401(k), roll into an IRA at Fidelity, Vanguard, or Schwab, or leave the balance in the former plan if it exceeds $1,000–$5,000.
✓Alternative Investments Entering 401(k) Plans: A 2025 executive order directed the Department of Labor to stop excluding alternative investments — non-publicly traded assets like private equity or real estate syndicates — from 401(k) menus. These options may begin appearing in plan lineups. Participants should audit current allocations and confirm holdings align with low-cost index fund strategies before any alternatives appear.

What It Covers

Brian Preston and Bo Hanson break down three 2026 401(k) rule changes — a raised contribution limit to $24,500, a new Roth-only requirement for high-earner catch-up contributions, and expanded alternative investment options — while reviewing core 401(k) mechanics including compounding math, withdrawal rules, and rollover decisions.

Key Questions Answered

•2026 Contribution Limits: The standard 401(k) deferral rises to $24,500 in 2026, up from $23,500. Workers aged 50–59 and 64+ get an $8,000 catch-up. Workers aged 60–63 qualify for a "super catch-up" of $11,250 on top of the base limit — the single largest annual contribution window available in employer-sponsored plans.
•High-Earner Catch-Up Rule Change: Workers earning above $145,000 in FICA wages who are 50 or older must now direct all catch-up contributions into Roth accounts — no pretax deduction allowed. A $200,000 earner who previously reduced taxable income to $169,000 will now see taxable income rise to roughly $175,500 under 2026 rules.
•Compounding Math by Starting Age: A 20-year-old saving $95 per month reaches $1 million by 65, with only $51,000 contributed personally. At 30, 89% of the million comes from growth. At 40, still 77%. Adding a dollar-for-dollar employer match cuts required personal contributions roughly in half, pushing growth-plus-match to 97% of the final balance for a 20-year-old.
•401(k) Rollover Decision on Job Change: 41% of Americans cash out at least part of their 401(k) when leaving a job, and 85% of those take the full balance — triggering ordinary income tax plus a 10% early withdrawal penalty. Three penalty-free alternatives exist: roll into a new employer's 401(k), roll into an IRA at Fidelity, Vanguard, or Schwab, or leave the balance in the former plan if it exceeds $1,000–$5,000.
•Alternative Investments Entering 401(k) Plans: A 2025 executive order directed the Department of Labor to stop excluding alternative investments — non-publicly traded assets like private equity or real estate syndicates — from 401(k) menus. These options may begin appearing in plan lineups. Participants should audit current allocations and confirm holdings align with low-cost index fund strategies before any alternatives appear.

Notable Moment

The hosts illustrate how large pretax 401(k) balances create compounding tax problems in retirement — forced required minimum distributions starting at age 73 can push retirees into higher brackets, increase Social Security taxability, and raise Medicare premiums, making Roth conversion planning in one's 50s a critical mitigation strategy.

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Episode Transcript

If you've been paying attention, you know that four zero one k rules have changed. But what exactly is different, and how does it affect your investment strategy? Brent, I am so excited because today, we are going to unpack everything you need to know about your four zero one k in 2026, including the latest changes and how they'll affect you. And with that, let's jump right in. So, Brian, four zero one k's, they are a big deal. That's not a surprise. A matter of fact, 43% of the working population, almost one in two workers, actually has access to a four zero one k right now. Yeah. I think it's important for because everybody knows we like four zero one k's and more to come on that. But we're gonna at least do a refresher on why four zero one k's are so powerful. Well and there have been some changes in 2026 that we want to make you aware. But before we talk about what's changed, let's talk about what stayed the same. Let's talk about what a four zero one k is. And if we're just gonna do, like, you know, Webster dictionary definition, a four zero one k is an employer sponsored retirement account with special tax benefits that allow employees to contribute a portion of their paycheck to save for their retirement. I get to sacrifice a little bit of today to pay for my future self. Okay. I love when we get to give definitions, but that's not the sexy sizzle stuff. Let's talk about why we actually love four zero one k's. That's why you could tell I was already giving a prelude to it. Here's the first thing. I love getting that free money. Get in there and get that free money from your employer because it's by the way, they've already built it into their compensation analysis. You're literally leaving money on the table if you don't take advantage of it. Yeah. We know that right now, 92% of employers, nine out of 10 employers with a four zero one k offer some sort of match, some sort of employer contribution. So not only do you get to save for your future and put away some of your dollars, but your employer is partnering with you, putting money in there that can help you build towards financial independence. I mean, even if there's not a match, there's still some tax benefits. And then here's the second part of this. You know, you hear about whether it's atomic habits or other things, they always say, hey. Make the good habits as easy as possible. Make the bad habits that much harder. Well, guess what is automatic for the people? Your four zero one k. Because this is gonna allow you to definitely streamline making the good habit of building wealth that much easier through automated automatic investments every month. Yeah. It's a beautiful thing when you can kind of set …

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