A new rule means some 401(k) contributions will no longer be tax-deferred. Here’s who will be affected

Staring next year, the highest-earning 401(k) participants who are eligible to make "catch-up" contributions will no longer be able to defer taxes on those contributions. FreshSplash/E+/Getty Images

A new rule is going into effect next year that will affect high earners who make “catch-up contributions” in their 401(k)s or other tax-deferred workplace retirement plans.

The rule, which was created under the Secure 2.0 retirement law , will essentially eliminate the immediate tax break for catch-up contributions that you get for the bulk of your other contributions to a 401(k) — or 403(b), 457(b), Simplified Employee Pension Plan (SEP) or SIMPLE IRA.

Here’s a breakdown of what will change and who, specifically, will be affected.

How it will work

Currently, if you’re over 50 and max