'For Merck employees, understanding the 2026 retirement plan changes and reviewing contribution elections before the new rules take effect can be an important step toward making informed long-term retirement planning decisions,' – Paul Bergeron, a representative of The Retirement Group, a division of Wealth Enhancement Group.

'Merck employees who take time to understand the upcoming retirement plan changes and coordinate with their financial, tax, and retirement planning professionals may be better positioned to make thoughtful decisions as the 2026 rules take effect,' – Tyson Mavar, a representative of The Retirement Group, a division of Wealth Enhancement Group.

In this article we will discuss:

1. The increased 2026 retirement plan contribution limits and what they may mean for retirement savings.

2. The new Roth catch-up contribution requirements for certain higher-income employees.

3. Practical steps Merck employees can take to prepare for the 2026 retirement plan changes.

The adjustments go far beyond a standard cost-of-living increase, and Americans will be able to save more for retirement in 2026. For Merck employees planning for retirement, new IRS contribution caps and significant changes to catch-up contribution rules may create additional opportunities while also introducing new planning considerations.

Retirement savings plans may be significantly affected by these changes, especially for workers who are getting close to retirement. Here's what's evolving, why it matters, and how you can prepare.

Increased 401(k), 403(b), and Governmental 457(b) Plan Elective-Deferral Limits

The maximum amount you can contribute from your pay to a 401(k), 403(b), or governmental 457(b) plan will rise beginning in 2026. A larger cap applies to nearly every category, including standard elective deferrals and traditional catch-up contributions. The only exception is the enhanced catch-up contribution, which remains available in 2026 for participants who are between ages 60 and 63 by the end of the applicable year. This enhanced contribution is often referred to as the 'super catch-up.'

For employees participating in workplace retirement plans, these increased limits may provide an opportunity to build additional retirement savings during the years leading up to retirement, when additional contributions can have a meaningful long-term impact.

The 2026 Roth Catch-Up Requirement: A Significant Change

One of the biggest retirement plan changes taking effect in 2026 will affect employees who make catch-up contributions.

If your prior-year FICA wages from a single employer exceeded $150,000, all catch-up contributions made to that employer's retirement plan generally must be contributed as Roth contributions to a designated Roth account, such as a Roth 401(k). This rule is applied separately for each employer. If you worked for multiple employers during the year, the wage threshold is determined independently for each one.

This requirement has two important implications.

First, because Roth catch-up contributions are made with after-tax dollars rather than pretax dollars, they do not reduce current taxable income. Employees affected by this requirement may want to review their tax strategy and paycheck withholding.

Second, Roth contributions can help build tax-free retirement income. If IRS requirements are met, qualified Roth withdrawals are generally tax-free. Depending on your long-term tax situation, this may provide valuable tax diversification during retirement.

There is also an important administrative consideration. If your employer's retirement plan does not offer a Roth contribution feature and you meet the applicable wage threshold, you generally may not be permitted to make catch-up contributions under that plan.

SIMPLE IRAs are exempt from this Roth catch-up requirement.

Why These Changes Matter

Many workers experience some of their highest earning years just before retirement, making it especially important to increase retirement savings whenever possible.

Although the higher contribution limits create valuable opportunities, it is important to monitor your annual contributions carefully. Excess contributions to certain retirement accounts may be subject to excise taxes if not corrected promptly and could also result in additional taxes and corrective distributions.

Rethinking Your Tax Strategy: Pretax Versus Roth

With more retirement plans offering Roth contribution options and new rules requiring Roth catch-up contributions for some higher-income employees, this may be a good time to reassess your tax diversification strategy.

• - Traditional pretax contributions reduce your current taxable income.

• - Eligible withdrawals from Roth contributions during retirement are generally tax-free.

If both options are available through your retirement plan, consider discussing your contribution strategy with your tax or financial professional to determine the combination that best aligns with your long-term retirement goals.

Job Changers Should Pay Close Attention

For 401(k) and 403(b) plans, elective-deferral limits apply across all employers combined. If you change jobs during the year, your new employer generally will not know how much you already contributed to your previous employer's retirement plan and cannot automatically prevent you from exceeding the annual limit.

If you establish your contribution rate early in the year and do not adjust it after changing employers, you could unintentionally exceed the annual contribution limit.

Monitoring your total contributions throughout the year remains one of the best ways to reduce unnecessary mistakes, corrective distributions, and additional taxes.

The annual salary-deferral limits for governmental 457(b) plans are separate and are not combined with the limits that apply to 401(k) and 403(b) plans.

How Merck Employees Can Prepare for 2026

Before the new year begins, consider taking the following steps:

• - Review your current salary deferral elections.

• - Estimate how the 2026 contribution limits and, if applicable, the Roth catch-up requirement could affect your tax situation.

• - Discuss your retirement contribution strategy with your tax or financial advisor.

• - Contact your employer or retirement plan administrator if you need to update your retirement plan elections.

- Even modest adjustments today may have a meaningful impact on your long-term retirement savings.

Small Increases Can Produce Meaningful Results

Incremental increases in retirement savings can compound over time. For example, an additional $1,000 invested each year earning a hypothetical 6% annual return could grow to more than $38,000 over 20 years.

The 2026 retirement plan changes represent more than routine inflation adjustments. Higher contribution limits and the Roth catch-up requirement may create new opportunities to increase retirement savings, diversify future retirement income, and make greater use of workplace retirement plan benefits. Understanding these changes in advance can help you make more informed retirement planning decisions.

We Are Here to Help

Understanding changing retirement plan rules can be challenging, particularly when new contribution limits and tax requirements may affect your long-term retirement strategy. The Retirement Group helps Merck employees better understand their retirement plan options, evaluate retirement savings strategies, and prepare for retirement. If you have questions about how the 2026 retirement plan changes may affect your personal situation, call The Retirement Group at (800) 900-5867 to speak with a financial professional.

Sources:

1. Berger, Margaret, and James Chakan. “2026 Retirement Plan Limits Now Set.”  Mercer , 14 Nov. 2025,  https://www.mercer.com/en-us/insights/law-and-policy/2026-retirement-plan-limits-now-set/ . Accessed 29 June 2026.

2. Internal Revenue Service.  Notice 2025-67: 2026 Cost-of-Living Adjustments Affecting Dollar Limitations for Pension Plans and Other Retirement-Related Items . U.S. Department of the Treasury, 13 Nov. 2025,  https://www.irs.gov/pub/irs-drop/n-25-67.pdf . Accessed 29 June 2026.

3. Kiplinger Staff. “Roth 401(k) Contribution Limits for 2026.”  Kiplinger , Apr. 2026,  https://www.kiplinger.com/retirement/retirement-plans/roth-401k-limits . Accessed 29 June 2026.

4. KPMG LLP. “Notice 2025-67: Increased Retirement Plan Contribution Limits for 2026.”  KPMG TaxNewsFlash , 13 Nov. 2025,  https://kpmg.com/us/en/taxnewsflash/news/2025/11/notice-2025-67-increased-retirement-plan-contribution-limits-2026.html . Accessed 29 June 2026.

5. Rugaber, Christopher. “IRS Raises 401(k) Limits by Largest Amount in Two Years. What to Know.”  Axios , 13 Nov. 2025,  https://www.axios.com/2025/11/13/401k-2026-contribution-limit-irs . Accessed 29 June 2026.