IRS Raises 401k Contribution Limit to 24500 for 2026
The IRS increased the 401(k) employee contribution limit to $24,500 for 2026, up from the prior year. Workers aged 50 and older can contribute an additional $8,000 as a catch-up contribution. Those aged 60 through 63 qualify for a higher super catch-up limit of $11,250 under the SECURE 2.0 Act.
Workers saving for retirement can put more money into their 401(k) plans in 2026. The IRS raised the annual employee contribution limit to $24,500, up from the prior year.
The increase applies to traditional and Roth 401(k) plans, as well as 403(b) and governmental 457 plans. The total combined limit for employee and employer contributions is $72,000.
Workers aged 50 and older can contribute an additional $8,000 as a standard catch-up contribution, bringing their total potential annual contribution to $32,500.
A new provision under the SECURE 2.0 Act gives workers aged 60 through 63 a higher "super catch-up" limit of $11,250. This applies only if the employer's plan allows it.
Financial advisors say the most important step for most workers is to contribute at least enough to capture any employer match. An employer match is an immediate return on investment that no other savings vehicle can replicate.
The IRA contribution limit for 2026 is $7,500, with an additional $1,100 catch-up for those aged 50 and older. These limits are separate from 401(k) limits.
Workers who contribute to multiple 401(k) plans, such as those who changed jobs during the year, must ensure their combined contributions do not exceed the $24,500 limit. Excess deferrals must be returned by April 15 to avoid double taxation.
Financial planners recommend reviewing contribution levels at the start of each year and adjusting payroll deductions to take full advantage of the higher limits.
