401(k) contribution limits for 2026
Editorial staff, J.P. Morgan Wealth Management
- The 401(k) employee contribution limit has increased to $24,500 in 2026 from $23,500 in 2025. The catch-up limit has increased to $8,000 for employees age 50-59 or 64 and older.
- For employees age 60-63, there is a higher catch-up limit of $11,250, but that remains unchanged from 2025.
- Contribution limits are adjusted annually based on inflation and changes in the Consumer Price Index for Urban Wage Earners and Clerical Workers.
- Strategically increasing your contributions and taking full advantage of employer matches can help you maximize your retirement savings.
A 401(k) is a commonly offered employer-sponsored retirement plan that has significant tax advantages. There are two common types of employee contribution typically available in 401(k) plans: Roth and traditional. It’s important to note that companies are not required to offer the Roth contribution option, even if they offer a traditional employee contribution option in the plan.
Participants in a traditional plan contribute pre-tax dollars, so they’ll get a tax deduction the year they contribute but still owe taxes on their withdrawals in retirement. Participants that have the Roth feature available in their plan can contribute after-tax funds, so they don’t get a tax deduction the year they contribute, but their qualified withdrawals in retirement are tax-free.
The IRS sets annual contribution limits for 401(k)s, which are adjusted every year for inflation. The combined total of traditional and Roth contributions counts toward the annual employee contribution limit. Understanding these limits can help you maximize your retirement savings and avoid penalties. Let’s consider what’s changed for 2026.
401(k) contribution limits for 2026
In 2026, the annual contribution limit is $24,500, up from $23,500 in 2025. The catch-up contribution limit for employees age 50-59 or 64 and older is $8,000, up from $7,500. The higher catch-up limit for employees age 60-63 remains unchanged from 2025, at $11,250. These changes apply to all 401(k), 403(b) and government 457 plans, as well as to the government’s Thrift Savings Plan.
If you have an employer match, your employer’s contributions won’t count toward your annual contribution limit as an employee; however, the IRS also sets a combined annual limit for both employee and employer contributions.
For 2026, the maximum combined contribution limit is 100% of your employee compensation or $72,000, whichever is less. For employees age 50-59 or 64 and older, the maximum contribution limit is $80,000 (to account for catch-up contributions). For employees age 60-63, the total limit is $83,250 (again, accounting for catch-up contributions).
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Why does the IRS change retirement plan contribution limits?
Yearly changes to retirement plan contribution limits stem from the IRS’s cost-of-living adjustment (COLA), which is tied to the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W). A 12-month measure of inflation, the CPI-W gauges how the costs of everyday goods and services have changed over time for working households. When the CPI-W rises enough over a 12-month period, the IRS increases retirement plan contribution limits and rounds the adjustment to the nearest $500. These annual updates help ensure contribution limits keep pace with rising costs and that retirement plans maintain their value over time.
Inflation and broader economic conditions also influence the yearly adjustments to retirement plan contribution limits. Even though inflation has come down from 2022, it’s still above the Federal Reserve’s 2% target. This reality is reflected in the 2026 adjustments, which are discussed in more detail below.
Comparison: 2026 401(k) contribution limits vs. previous years
The 2026 updates reflect slightly larger increases than those seen from 2024 to 2025. While employee contribution limits rose by only $500 in 2025, the 2026 limit increased by $1,000. The catch-up contribution limit also rose for the first time since 2023, and the combined employee and employer contribution limit increased by $2,000.
401(k) contribution limits for 2024, 2025 and 2026
2024 | 2025 | 2026 |
|---|---|---|
Employee contribution limit | ||
$23,000 | $23,500 | $24,500 |
Catch-up contribution limit | ||
$7,500 | $7,500 | $8,000 (age 50-59 and 64+) |
Combined employee + employer contribution limit (not including catch-up) | ||
Cannot exceed the lesser of 100% of employee compensation or $69,000 | Cannot exceed the lesser of 100% of employee compensation or $70,000 | Cannot exceed the lesser of 100% of employee compensation or $72,000 |
Because the IRS calculation factors in an entire year of inflation data, higher price growth early in a given year can still push up contribution limits for the following year. If inflation and wage growth remain elevated compared to historical averages, annual contribution limits could continue increasing. In 2025, the CPI-W rose enough to support the 2026 bump.
Maximizing your 401(k) contributions in 2026
Maximizing your annual 401(k) contributions requires careful planning, especially if you’re balancing other financial priorities. Start by reviewing your current contribution rate and increasing it gradually. For example, you may find that boosting your contribution by 1% to 2% each year is manageable. You can also time these increases around raises or bonuses, a move that can help you save more without reducing your take-home pay.
Take advantage of catch-up contributions if you’re eligible
Older workers have an additional advantage in the form of catch-up contributions. In 2026, adults age 50-59 or 64 and older can contribute an extra $8,000 to their 401(k), bringing their total potential employee contribution to $32,500. Similarly, employees age 60-63 can contribute an additional $11,250, bringing their total potential employee contribution to $35,750. For these individuals, setting up automatic increases or directing bonus income specifically toward catch-up contributions can make it easier to reach the higher limit.
Know your employer’s matching and vesting schedules
Employer-matched 401(k) contributions can also play a significant role in maximizing your overall retirement savings. If you are able, it can be helpful to contribute at least enough to earn your full company match; this ensures you’re not leaving “free money” on the table. Keep in mind, though, that some employers won’t start matching employee contributions until after the employee’s designated probationary period.
It’s also helpful to review your 401(k) plan’s vesting schedule so you know when your employer’s contributions will fully belong to you. For example, an employer might offer a cliff vesting schedule, which means employees fully own their vested benefits – including employer-matched retirement contributions – after a specific amount of time. Under a graded vesting schedule, however, employees gradually own larger and larger percentages of their vested benefits until they reach 100%.
The bottom line
Whether you’re close to retirement or just starting to save, understanding how 401(k) contribution limits – and their annual adjustments – work can help you plan more effectively. By taking advantage of higher limits, employer matches and the tax benefits offered by these plans, you can help improve your long-term financial security.
If you’re unsure how much to contribute – or which retirement account type best suits your goals – you may want to speak with a financial advisor who can help you develop a personalized plan.
Frequently asked questions about 401(k) contribution limits
If you contribute more than the annual limit, the excess amount is considered taxable income. You’ll need to contact your plan administrator and request a corrective distribution before the IRS deadline to avoid double taxation.
If you exceed the annual contribution limits, you must notify your plan administrator and withdraw the excess amount (plus any earnings) by April 15 of the following year. Your plan will issue updated tax forms reflecting the correction.
Yes, you can contribute to more than one employer-sponsored plan in the same year, but your total employee contributions across all 401(k), 403(b) and similar plans cannot exceed the total annual limit. You may also contribute to an IRA (individual retirement account) separately, since this type of plan is subject to its own contribution limits.
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