Updated With 2026 IRS Limits, Including the Super Catch-Up, SWA 18% NEC, 2% MBCBP and Roth NEC Capability
Key Takeaways
- 2026 raises your 402(g), 415(c) and 401(a)(17) limits, which makes it easier to fully fund your 401(k) while maximizing Southwest’s 18% NEC and 2% MBCBP benefits.
- Higher NEC plus mandatory Roth catch‑ups and the new Roth NEC option mean funding order really matters — front‑loading 402(g) helps you avoid 415(c) “shove‑outs” and helps protect your employee contribution space.
- With the Roth catch‑up, Roth non-elective contributions (NEC) and in‑plan Roth conversions all available in 2026, Southwest pilots have more control than ever over lifetime tax brackets and retirement income flexibility.
When the calendar rolls over, our retirement buckets reset — limits refresh, buckets empty and we get another opportunity to fill those buckets with intention. For Southwest pilots, 2026 not only brings higher retirement plan contribution limits but also new flexibility, including expanded Roth options (mandatory Roth catch-up and optional Roth NEC).
If you haven’t revisited your contract details recently, it may be helpful to pair this article with our overview of the 2020 Southwest financial considerations, which outlines the broader landscape for Southwest pilots.
Contribution percentages still skew slightly high because fractional deferral percentages aren’t allowed — every contribution election must round up to a whole number.
Knowing the 2026 limits now allows you to optimize your financial flight plan early. The sooner your dollars enter the market, the sooner they can compound while you’re flying airplanes, drinking good coffee, traveling or enjoying life away from the flight deck.
A long-term, low-cost, diversified portfolio works best when it’s paired with smart tax planning. Below are the key retirement plan contribution limits and planning points Southwest Pilots need to navigate 2026 with precision.
A quick note for pilots nearing retirement: If you’re looking to reduce the year-end tax surprise from Roth NEC contributions while still building long-term Roth assets, there are planning levers available that can help smooth the impact. If this sounds relevant, reach out for a brief conversation to see if it applies to you.
Key Priorities
2026 brings higher contribution limits, a larger 415(c) bucket, an increased 18% NEC and significantly expanded Roth opportunities — including mandatory Roth catch-ups, the ability to elect Roth NEC and ongoing in-plan Roth conversions.
The key priorities for Southwest pilots in 2026 are to:
- Get your employee dollars in early to protect your 402(g) space before the increased NEC approaches the shove line.
- Understand that all age 50+ catch-up contributions are Roth for high earners, which will affect take-home pay once catch-up begins. If you want a quick refresher on why catch‑up contributions can be so valuable, see our article on reasons to make catch‑up contributions.
- Coordinate your Roth strategy carefully (Roth 402(g), Roth NEC, catch-ups and in-plan conversions) to manage lifetime taxes effectively. Pairing this with a broader perspective on SECURE Act 2.0 changes for high earners can also be helpful.
The combination of higher limits and more Roth options makes 2026 a powerful year for long-term, tax-advantaged growth.
415(c) and 402(g) Limits for 2026
402(g): $24,500
Your personal 402(g) employee contribution limit for 2026 is $24,500 (pre-tax or Roth, at your discretion).
415(c): $72,000
Your 415(c) limit of $72,000 includes:
- Your 402(g) employee contributions
- SWA’s 18% NEC contributions
This limit doesn’t include catch-up contributions, as those sit outside 415(c). Think of 415(c) as a big bucket with your 402(g) bucket sitting inside it. If NEC fills too much of the large bucket first, it may shove out your employee contribution space.
The NEC Shove Line (Critical in 2026)
NEC shove line: $47,500
This is the point at which NEC dollars begin blocking or “shoving” your 402(g) space. $47,500 is the point where the remaining space in the 415(c) bucket equals the full 402(g) limit ($72,000 − $24,500 = $47,500).
If NEC reaches this line before you, then:
- Your “shoved out” dollars can’t be contributed
- That space is permanently lost
Warning: You must fill your 402(g) bucket in order to be eligible for catch-up contributions. This is why front-loading remains crucial in 2026.
If you wait until late summer to “get serious,” the company has already been quietly filling the bucket without you.
401(a)(17) Compensation Limit in 2026
401(a)(17): $360,000
The 2026 401(a)(17) limit is $360,000. At 18% NEC:
$360,000 × 18% = $64,800 NEC max
Implications include:
- SWA puts in $64,800
- The 415(c) cap is $72,000
- A pilot under 50 must contribute $7,200 to fully fill 415(c):$64,800 (NEC) + $7,200 (you) = $72,000
If you front-load the full $24,500 early:
- SWA can only fit $47,500 of NEC inside 415(c)
- The remainder spills into cash or NQ plans, per your plan’s rules
For context on how these numbers fit into broader IRS retirement plan limits and recent tax-planning changes, you may find our year‑end tax strategies article helpful.
Pilots Age 50+ in 2026
Catch-up contributions sit outside 415(c):
- 414(v) Catch-Up (50–59, 64–65): $8,000 — mandatory Roth for high earners
- 414(v) Super Catch-Up (60–63): $11,250 — mandatory Roth for high earners
These catch‑up dollars are in addition to your 402(g) employee contribution limit and subject to special rules under the SECURE Act 2.0 for higher earners.
About the Contribution Percentages in 2026
If you want help with anticipated contribution percentage changes for 2026, please reach out — we know this can all get a bit confusing. For additional background on how contribution limits generally work and how the SECURE Act 2.0 reshaped catch‑up rules, see our overview of high earner SECURE 2.0 catch‑up and Roth rules.
402(g) Funds First: Contribution Rate Examples
The contribution rate examples below assume approximately $360,000 of eligible compensation, steady flying and elections in place early in the year.
- Under 50: 10% — beats NEC into 415(c) ($24,500 pilot; ~$47,500 company). At 10% you’ll hit $24,500 of your contributions before the company hits the shove line of $47,500. The company hits the shove line at $263,889 of eligible income; you hit $24,500 (10%) at $245,000.
- Ages 50-59 and 64-65: 10% — fills 402(g) and 414(v).
- Math: 360,000 × 10% = $36,000
- This fully funds the $32,500 employee total, and you beat the company to the shove line and fully fund your 402(g) bucket first.
- Ages 60-63 (Super Catch-Up): 10% — fills 402(g) and Super Catch-Up.
- Math: 360,000 × 10% = $36,000
- This fully funds the $35,750 employee total, and you beat the company to the shove line and fully fund your 402(g) bucket first.
For more on maximizing catch‑up contributions and Roth strategies generally, you may also want to review our article on catch‑up contributions and our overview of Roth IRAs vs. traditional IRAs.
Note on Age Rules
For the 2026 tax year, eligibility for catch-up contributions is based on the age you attain by December 31. If you turn 50 on or before year-end, you’re eligible for the full $8,000 standard catch-up for the entire year.
Under the SECURE Act 2.0, if you attain age 60, 61, 62 or 63 by year-end, you qualify for the enhanced “super catch-up” limit, which for 2026 remains $11,250. If you turn 64 at any point during the year, you no longer qualify for the super catch-up and revert to the standard $8,000 amount. Note: Beginning in 2026, if your prior-year wages from SWA exceed the IRS threshold (indexed; currently $150,000), catch-up contributions must be Roth.
A Note on Take-Home Pay When Catch-Up Begins
As soon as your catch-up contributions start (either the $8,000 catch-up or the $11,250 super catch-up), your take-home paycheck may decrease if your regular 402(g) contributions were previously pre-tax (due to your withholdings). Catch-up dollars must be contributed as Roth if you made more than $150,000 in 2025, which means they’re after-tax, increasing your taxable income relative to pre-tax 402(g) contributions.
This is normal — it simply reflects the shift from pre-tax to after-tax treatment for the catch-up portion.
Total Contribution Possibilities in 2026 (Including Mandatory Roth Amounts)
Ages <50
- Employee Total: $24,500
- Mandatory Roth Portion: $0
- Total With NEC: $72,000
Ages 50-59 and 64-65
- Employee Total: $32,500
- Mandatory Roth Portion: $8,000
- Total With NEC: $80,500
Ages 60-63 (super catch-up)
- Employee Total: $35,750
- Mandatory Roth Portion: $11,250
- Total With NEC: $83,550
New for 2026: Roth NEC Contributions (Company Dollars Can Now Be Roth)
2026 brings a major structural improvement: You may now elect Roth NEC (i.e., your company’s 18% non-elective contribution can be deposited as Roth). This creates another lever for long‑term tax diversification.
Tax Warning: Roth NEC = No Tax Withholding
The NEC enters your 401(k) as Roth, but taxes aren’t withheld from your paycheck. You must cover the tax via estimated payments or at filing.
This is very different from Roth catch-up contributions. Choosing Roth vs. pre-tax is highly situation-dependent and nuanced, so broad one-size-fits-all advice rarely holds. It’s not a universal “yes/no” switch; it depends on your tax picture now, your expected tax picture later and your goals, among other details.
For a deeper dive on when Roth strategies make sense, see our article on rethinking the Roth IRA. While it focuses on IRAs, many of the same principles apply when evaluating Roth contributions in a workplace retirement plan.
Roth Catch-Up vs. Roth NEC (They Aren’t the Same)
Roth Catch-Up (Your Dollars)
The catch-up contribution must now be Roth for high earners ages 50+. Taxes are withheld automatically, so there are no year-end surprises (beyond the higher withholding you’ll see in pay).
Roth NEC (Company Dollars)
Electing the Roth NEC is optional, but it can be a powerful long-term planning tool. It’s important to note that taxes aren’t withheld, so electing this option can raise your taxable income by up to $64,800.This decision should be coordinated with an advisor and integrated into your broader retirement income and tax strategy.
In-Plan Roth Conversions (IPRC)
In-plan Roth conversions are separate from NEC and catch-up elections. With these, you can convert existing traditional 401(k) dollars to Roth inside the plan.
Potential benefits of in-plan Roth conversions include:
- Keeping assets inside the plan
- Helping to flatten lifetime tax exposure
- Precise tax-bracket management
- Reducing future RMDs under current rules
- Working alongside the backdoor Roth IRA
Tax note:
- Conversion amounts are taxable
- Taxes aren’t withheld automatically (similar to the Roth NEC)
- Many pilots convert just enough to fill their current tax bracket
If you’re considering whether to prioritize in‑plan conversions or external Roth IRA strategies, you may also want to read our piece on Roth IRA optimization for higher earners.
With Roth NEC, the Roth catch-up and in-plan Roth conversions, pilots now have unprecedented control over their lifetime tax outcome.
FAQ: Will Excess Dollars Spill Into the MBCBP in 2026?
No, excess dollars won’t spill into the MBCBP in 2026.
Despite earlier projections, the IRS has not yet approved the MBCBP spill. The earliest possible year this will be approved for is 2027.
Until approved, excess above 415(c) flows to the excess benefit non-qualified plan, not to the MBCBP.
For now, the MBCBP 2% continues: $360,000 × 2% = $7,200
Once approved, spill order will be:
- Fill 415(c)
- Spill to MBCBP
- Remaining to NQ plan
Final Thoughts
Be intentional. Like a good flight, brief early and fly a plan you can actually follow so that you can minimize tax surprises and avoid 402(g) shove-outs.
