The IRS raised the 401(k) limit to $24,500 for 2026. Most people never reach it, but almost everyone should get the full employer match. Here are the limits and the math.
By the CalcLedger editorial team · Updated October 2026 · 4 min read · Examples use illustrative rates · How we calculate
Retirement saving is not a loan, but it competes with every loan decision: paying off a card faster, making extra mortgage payments, saving for a down payment. Knowing the limits, and what your employer adds for free, helps you put each dollar where it does the most.
The IRS announced the 2026 limits on November 13, 2025 (Notice 2025-67):
| Limit (2026) | Amount |
|---|---|
| Employee deferral: 401(k), 403(b), governmental 457, TSP | $24,500 |
| Catch-up, age 50 and older | $8,000 (total $32,500) |
| Catch-up, ages 60 to 63 | $11,250 (total $35,750) |
| Total from you and your employer (annual additions) | $72,000, or 100% of pay if less |
| IRA contribution | $7,500 (+ $1,100 at 50 and older) |
To reach $24,500 you would contribute about $2,042 a month, or 24.5% of a $100,000 salary. Most savers contribute far less, which is fine; what matters most is capturing the match.
According to the IRS catch-up rules, starting in 2026, people in plans that offer a Roth option must make catch-up contributions as Roth contributions if their prior-year wages from that employer exceeded $150,000. You still get to save the money, but you pay tax on it now instead of later. Check with your plan administrator how your plan handles it.
A common formula is a 50% match on the first 6% of pay. Here is what that means on a $60,000 salary:
| You contribute | Your money per year | Employer adds | Total per year |
|---|---|---|---|
| 3% of pay | $1,800 | $900 | $2,700 |
| 6% of pay | $3,600 | $1,800 | $5,400 |
What the match can grow to in 30 years
Monthly contributions, illustrative 6% annual return compounded monthly
Contributing 6% instead of 3% costs you $1,800 more a year (less after the tax break) but brings in $900 of employer money. At an illustrative 6% return, that extra $75 a month of match alone grows to about $75,300 in 30 years. Returns are not guaranteed; you can test other rates in the compound interest calculator.
A 50% match is an instant 50% return on the money you put in, which beats paying down almost any debt. After the match, the order usually looks like this:
Weighing extra mortgage payments against investing? See pay off the mortgage early or invest. Juggling several card balances? Avalanche vs. snowball helps you pick the order.
What is the 401(k) limit for 2026?
You can defer up to $24,500 in 2026. If you are 50 or older you can add an $8,000 catch-up, or $11,250 if you are 60 to 63, according to the IRS.
Does the employer match count toward the $24,500 limit?
No. The $24,500 applies to your own deferrals. Employer contributions count toward a separate total limit of $72,000 (or 100% of pay, if less) for 2026.
Do I have to make Roth catch-up contributions?
Starting in 2026, if your prior-year wages from the employer sponsoring the plan were over $150,000, your catch-up contributions must be Roth. Other savers can choose, if the plan offers Roth.
Should I pay off debt or contribute to my 401(k)?
Most people should contribute at least enough to get the full employer match first, then focus on high-interest debt such as credit cards, then build savings and raise contributions.
This guide is general education, not tax or investment advice. Growth figures use an illustrative 6% return; actual returns vary and can be negative.
Rules, limits and program details are checked against these official sources. Example numbers are calculated by CalcLedger with the formulas on our how we calculate page. Read our editorial policy.