How to reduce the impact

1. Prepare for a smaller paycheck: Since Roth contributions don’t lower your taxable income, your take-home pay may shrink. Adjust your household budget and savings strategy before 2026 begins.

2. Monitor Medicare premiums: Higher AGI can trigger higher Medicare Part B and Part D premiums. If the Roth catch-up pushes your income into a higher IRMAA bracket, consider reducing or eliminating catch-up contributions altogether.

3. Review lost tax benefits: New deductions — such as the “senior bonus deduction” discussed below — have income limits. Losing a pre-tax contribution may cost you multiple tax breaks at once.

That said, Roth accounts still offer long-term advantages, including tax-free withdrawals and no RMDs. The key is deciding whether the immediate tax cost makes sense for your overall retirement income planning strategy.