401(k) Contribution Limits 2026: Tax Savings Guide
2026 401(k) limits: $24,500 deferral, $8,000 catch-up, $11,250 at ages 60-63, and $72,000 total. See what maxing out actually saves you in federal tax.
This article is for educational purposes only and is not tax, legal, or financial advice. Tax rules change periodically, always check current IRS guidance or consult a qualified tax professional.
Quick Answer: The 2026 401(k) Contribution Limit
You can defer $24,500 of your own pay into a 401(k) in 2026, up $1,000 from the $23,500 limit in 2025. Add $8,000 if you’re 50 or older, or $11,250 if you turn 60, 61, 62, or 63 during the year.
If those deferrals are pre-tax, they come off the top of your taxable income. At a 22% marginal rate, maxing out is worth about $5,390 off your federal tax bill. At 24%, it’s $5,880.
Key Takeaways
- $24,500 is the 2026 employee deferral limit for 401(k), 403(b), most governmental 457(b) plans, and the federal Thrift Savings Plan.
- The 60-63 catch-up replaces the 50+ catch-up. It is $11,250 instead of $8,000, not on top of it.
- Only pre-tax deferrals cut this year’s tax. Roth 401(k) contributions use the same $24,500 ceiling but produce no current-year deduction.
- New for 2026: if your 2025 Social Security wages from that employer topped $150,000, your catch-up must be Roth, so it stops lowering your taxable income.
- A 401(k) does not reduce FICA. Social Security and Medicare tax still apply to your full wages.
- $72,000 is the combined ceiling for your deferrals plus employer match plus any after-tax contributions.
2026 401(k) Contribution Limits at a Glance
The IRS announced the 2026 figures in Notice 2025-67. Year over year:
| Limit | 2025 | 2026 | Change |
|---|---|---|---|
| Employee elective deferral | $23,500 | $24,500 | +$1,000 |
| Catch-up, age 50+ | $7,500 | $8,000 | +$500 |
| Catch-up, ages 60-63 | $11,250 | $11,250 | No change |
| Total deferral, age 50+ | $31,000 | $32,500 | +$1,500 |
| Total deferral, ages 60-63 | $34,750 | $35,750 | +$1,000 |
| Total additions (employee + employer) | $70,000 | $72,000 | +$2,000 |
If you see a page claiming the 2026 limit is $23,500, it’s a stale 2025 number. Several sites titled “2026” still print the old figures.
One limit, one person. The $24,500 is a single annual ceiling across your 401(k), 403(b), and TSP deferrals combined, not $24,500 per plan. Governmental 457(b) plans are the exception: the dollar limit is the same, but the IRS treats it as a separate bucket, so someone with both a 403(b) and a 457(b) can defer the full amount to each.
What Maxing Out Actually Saves You in Tax
Most explanations stop at “pre-tax contributions reduce your taxable income.” True, and not much help when you’re deciding whether to stretch for the max. The dollar figures are below.
A pre-tax deferral comes off the top of your income, so it is generally worth your highest marginal rate. Against the 2026 federal tax brackets:
| Marginal rate | Federal tax reduced |
|---|---|
| 12% | $2,940 |
| 22% | $5,390 |
| 24% | $5,880 |
| 32% | $7,840 |
| 35% | $8,575 |
If you’re not sure which row is yours, the tax bracket calculator will place your taxable income, and the effective tax rate calculator shows the blended rate you actually pay.
Example 1: Single filer, $95,000 salary
Standard deduction of $16,100 leaves $78,900 of taxable income, squarely in the 22% bracket. Deferring the full $24,500 drops taxable income to $54,400, still above the $50,400 floor of the 22% bracket.
Every dollar of the deferral escapes at 22%. Federal tax saved: $5,390.
Example 2: Single filer, $140,000 salary (the blended case)
This is where the clean tables break down. Taxable income before deferring is $123,900, which is in the 24% bracket. The full $24,500 deferral pulls taxable income down to $99,400, crossing back into the 22% bracket at $105,700.
- $18,200 of the deferral comes off at 24% = $4,368
- $6,300 of the deferral comes off at 22% = $1,386
Federal tax saved: $5,754, not the $5,880 a flat 24% assumption would predict. Any deferral large enough to span a bracket boundary saves a blend of the two rates.
Example 3: Married filing jointly, $290,000 combined
After the $32,200 joint standard deduction, taxable income is $257,800, inside the 24% bracket. One spouse maxing out at $24,500 brings it to $233,300, still in the 24% bracket, so the whole deferral saves 24%. Federal tax saved: $5,880. If both spouses max out, the second $24,500 will start crossing into 22%.
FICA Doesn’t Move
A pre-tax 401(k) deferral reduces W-2 Box 1 (federal taxable wages). It does not reduce Box 3 (Social Security wages) or Box 5 (Medicare wages).
Take the $95,000 filer above. Box 1 falls to $70,500, but Boxes 3 and 5 stay at $95,000, and 6.2% Social Security plus 1.45% Medicare still comes to $7,267.50 either way. The 2026 Social Security wage base is $184,500, so a deferral won’t get you under it either. If you assumed you were saving 22% plus 7.65%, you weren’t. (Self-employed readers face the same rule from the other side.)
State income tax is a different story. Most states start from federal taxable income or federal AGI, so a pre-tax deferral typically cuts state tax too. Rates vary too much to publish a single number, but it’s real money on top of the federal savings.
A lower AGI has knock-on effects as well. Because AGI drives dozens of phase-outs, a deferral can pull you back into eligibility for credits you were about to lose. One of them is the Saver’s Credit: 401(k) deferrals are qualifying contributions for Form 8880, and the 2026 AGI ceilings are $80,500 (married filing jointly), $60,375 (head of household), and $40,250 (single). The Saver’s Credit calculator will tell you if you clear the bar.
Catch-Up Contributions: $8,000, $11,250, and the New Roth Rule
Turn 50 at any point during 2026 and you can add $8,000 on top of the $24,500, for a $32,500 total.
If you turn 60, 61, 62, or 63 during 2026, the catch-up rises to $11,250 instead, for a $35,750 total. The most common mistake here is treating those two numbers as additive. The $11,250 replaces the $8,000. It is never $8,000 plus $11,250. The higher catch-up is also plan-optional, so your employer’s plan document has to permit it.
| Age during 2026 | Base | Catch-up | Total |
|---|---|---|---|
| Under 50 | $24,500 | None | $24,500 |
| 50 to 59 | $24,500 | $8,000 | $32,500 |
| 60 to 63 | $24,500 | $11,250 | $35,750 |
| 64 and older | $24,500 | $8,000 | $32,500 |
Maxing out at 24% is worth $7,800 at the $32,500 level and $8,580 at $35,750, assuming the whole amount is pre-tax. That last assumption is where 2026 gets complicated.
The Roth catch-up mandate starts biting in 2026
Under SECURE 2.0, if you’re 50 or older and your FICA wages from that employer in 2025 exceeded $150,000, your 2026 catch-up contributions must be designated Roth. The IRS granted an administrative transition period that ended December 31, 2025, which is why the rule lands now.
A Roth catch-up produces no current-year deduction. If you’re 55, earning $200,000, and used to treat the catch-up as another $8,000 of deduction, that slice is gone. After the $16,100 standard deduction that puts you in the 24% bracket, so it’s $1,920 of federal savings you no longer get this year.
Four details that usually get flattened in summaries of this rule:
- It’s keyed to W-2 Box 3, your Social Security wages, not your AGI and not household income.
- It’s per employer. Change jobs and the new employer looks at your prior-year wages from them, which for a first-year hire is zero.
- Self-employed people with no FICA wages aren’t caught by it, which matters if you run a Solo 401(k). Our Solo 401(k) contribution calculator handles that structure.
- If your plan has no Roth feature, affected participants can’t make catch-up contributions at all.
The final regulations (TD 10033) are technically applicable to tax years beginning after December 31, 2026. For 2026, plans may apply a reasonable, good-faith interpretation of the statute, so implementation details can vary by employer. Ask your plan administrator rather than assuming.
Pre-Tax vs. Roth 401(k): Which One Cuts This Year’s Tax Bill
Only pre-tax does. Both buckets share the same $24,500 ceiling, and you can split between them however you like, but your 2026 deduction only comes off the pre-tax side.
The tradeoff is bracket timing. A pre-tax dollar is deducted at today’s marginal rate and taxed at whatever your rate is in retirement. A Roth dollar is taxed now and comes out tax-free later. The same logic applied to IRAs walks through how to think about that choice.
Two things people get wrong:
- Employer match is always pre-tax, even if 100% of your own deferrals are Roth. The match lands in a traditional bucket and is taxed when distributed.
- Deferred tax is not forgiven tax. Traditional balances eventually face required minimum distributions, and Roth 401(k) balances no longer do.
The $72,000 Total Limit, Employer Match, and Two Jobs
Your $24,500 is only one piece of a larger cap. Total annual additions to your account, meaning your deferrals plus employer match plus profit sharing plus any after-tax contributions, cannot exceed $72,000 in 2026 (or 100% of your compensation, whichever is less). Catch-up contributions sit outside that ceiling.
Employer match does not count against your $24,500. A $24,500 deferral plus a $10,000 match is $34,500 of annual additions, well under the cap, and you have not overcontributed.
Two more figures worth knowing: only the first $360,000 of compensation counts for plan purposes in 2026, and the highly compensated employee threshold stays at $160,000. HCEs sometimes get their deferrals capped below $24,500 if the plan fails nondiscrimination testing.
The two-jobs trap
The $24,500 elective deferral limit is per person, not per plan. Switch employers in July and each payroll system will happily let you defer $24,500, because neither one can see the other.
The fix is on you. Tell the new plan what you already deferred, or track it yourself. If you do overshoot, request a corrective distribution of the excess (plus earnings) by April 15, 2027. Miss that deadline and the excess is taxed twice: once in 2026 and again when it eventually comes out.
401(k) and IRA in 2026: Two Separate Buckets
The limits don’t compete. You can defer $24,500 into a 401(k) and contribute $7,500 to an IRA in 2026 (plus a $1,100 IRA catch-up at 50 or older).
Being covered by a workplace plan does not block an IRA contribution. It only limits how much of a Traditional IRA contribution you can deduct, through income phase-outs. The IRA deduction calculator runs those ranges, and the Roth conversion calculator covers the other direction.
One deadline difference that trips people up: IRA contributions for 2026 can be made until April 2027, but 401(k) deferrals must come out of paychecks dated on or before December 31, 2026. There is no grace period.
Are You on Track to Max Out by December?
If you’re reading this mid-year, the pace matters more than the limit. The math is short:
($24,500 - contributed so far) / remaining paychecks = per-paycheck deferral
Say you’ve put in $12,000 through July and have 10 biweekly paychecks left. You need $1,250 per check. On a $95,000 salary, that’s roughly 34% of gross pay, and plenty of plans cap the deferral percentage below that. Check your plan’s ceiling before you assume you can catch up.
Two cautions before you crank the percentage up:
- Front-loading can cost you match dollars. Many plans match per pay period. Hit $24,500 in October and you stop deferring, which means no match on November and December paychecks unless your plan has a true-up provision. Read the summary plan description.
- Watch your take-home pay. A big deferral bump changes your net check immediately. The take-home pay calculator shows what lands in your account.
Once you know your deferral number, it’s worth seeing what it does to the bottom line of your return. Tax47 captures retirement contributions on the W-2 form and flags them in its Tax Break Finder, so you can change the deferral and watch the estimated refund move. If you’d rather start from the refund side, the tax refund estimator does the same job in the browser. And if you’re weighing an early withdrawal instead of a contribution, the 401(k) early withdrawal penalty calculator prices out what that costs.
Sources & References
- IRS: 401(k) limit increases to $24,500 for 2026, IRA limit increases to $7,500: The 2026 deferral limit, catch-up amounts, the $150,000 Roth catch-up wage threshold, and Saver’s Credit AGI ceilings.
- IRS Notice 2025-67: The underlying notice with the full 2026 cost-of-living schedule.
- IRS: COLA increases for dollar limitations on benefits and contributions: Authority for the $72,000 annual additions limit, the $360,000 compensation cap, and the $160,000 HCE threshold.
- IRS: Treasury and IRS issue final regulations on the new Roth catch-up rule: The applicability-date nuance and the good-faith compliance standard for 2026.
- IRS: Retirement topics, 401(k) and profit-sharing plan contribution limits: The per-person deferral limit, excess deferrals, and the April 15 correction deadline.
- IRS: Retirement topics, catch-up contributions: Age-based catch-up eligibility and plan-option rules.
- IRS Revenue Procedure 2025-32: 2026 bracket thresholds and standard deduction amounts used in the worked examples.
- IRS: Retirement savings contributions credit (Saver’s Credit): How 401(k) deferrals qualify for the Form 8880 credit.
Frequently Asked Questions
What is the 401(k) contribution limit for 2026?
$24,500 in employee elective deferrals, up from $23,500 in 2025. The same limit applies to 403(b), most governmental 457(b) plans, and the federal Thrift Savings Plan.
How much tax does maxing out a 401(k) save in 2026?
A full $24,500 pre-tax deferral cuts federal income tax by roughly your marginal rate times the contribution, about $5,390 at 22% and $5,880 at 24%, plus state income tax in most states. Roth deferrals save nothing this year.
How much can I contribute to my 401(k) if I'm over 50 in 2026?
$32,500, which is the $24,500 base plus an $8,000 catch-up. If you turn 60, 61, 62, or 63 during 2026, the catch-up rises to $11,250 for a $35,750 total, provided your plan allows it.
Does my employer's match count toward the $24,500 limit?
No. The match is separate from your deferral limit, but employee deferrals, employer match, profit sharing, and after-tax contributions together cannot exceed $72,000 (or 100% of your compensation) in 2026.
Does a 401(k) contribution reduce Social Security and Medicare taxes?
No. Pre-tax deferrals reduce federal (and usually state) income tax, but FICA is withheld on your full wages. Your W-2 Box 3 and Box 5 amounts are unchanged.
Do I have to make my catch-up contributions Roth in 2026?
Only if you're 50 or older and your FICA wages from that employer in 2025 were more than $150,000. If so, the catch-up must be a designated Roth contribution and won't lower your 2026 taxable income.
Can I contribute to both a 401(k) and an IRA in 2026?
Yes. They're separate limits, $24,500 plus $7,500 for an IRA. Being covered by a workplace plan doesn't block an IRA contribution, though it can limit how much of a Traditional IRA contribution you can deduct.
What happens if I contribute too much to my 401(k)?
The $24,500 limit is per person, not per plan, so switching jobs mid-year can create an excess deferral. Ask the plan to distribute the excess by April 15 of the following year, or the money gets taxed twice.