2026 401(k) contribution limits
| Limit | 2025 | 2026 |
|---|---|---|
| Employee deferral (traditional + Roth combined) | $23,500 | $24,500 |
| Catch-up, age 50+ | $7,500 | $8,000 |
| “Super” catch-up, ages 60–63 (replaces the regular catch-up) | $11,250 | $11,250 |
| Total additions (you + employer), not counting catch-up | $70,000 | $72,000 |
| Compensation that can count toward contributions | $350,000 | $360,000 |
| Roth catch-up wage threshold (prior-year FICA wages) | $145,000 | $150,000 |
Source: IRS IR-2025-111 (November 13, 2025); IRS Notice 2025-67 via Foley & Lardner.
Put together, the most you can defer from your own paycheck in 2026 is:
- Under 50: $24,500
- 50–59 or 64 and older: $32,500
- 60–63: $35,750
The 60–63 catch-up comes from SECURE 2.0. It applies in the calendar years you turn 60, 61, 62 and 63. At 64, you drop back to the regular $8,000 catch-up. Check that your plan has set it up before you change your election.
The $24,500 limit is per person, not per plan. If you switch jobs mid-year, your deferrals at both employers count toward one limit. Payroll at your new job won’t know what you put in at the old one, so track it yourself.
The new Roth catch-up rule for higher earners
Starting January 1, 2026, if you’re 50 or older and your FICA wages (Social Security wages) from your employer were more than $150,000 in 2025, any catch-up contributions you make in 2026 must be Roth. That means after-tax dollars, with no deduction this year. Your regular $24,500 can still go in pre-tax.
- If your plan has no Roth option, you can’t make catch-up contributions at all.
- Self-employed people and partners aren’t affected, because they don’t have FICA wages.
- The IRS issued final regulations in September 2025 and is allowing good-faith compliance while plans update their systems. Expect your plan to send a notice or change your elections automatically.
For someone in the 32% bracket, moving an $8,000 catch-up from pre-tax to Roth raises this year’s federal tax by about $2,560. The money then grows tax-free, and Roth 401(k) balances no longer have required minimum distributions during your lifetime.
How the employer match works
Many employers add money when you contribute. A common way to describe it is a percentage of your contribution up to a cap. Here’s a hypothetical formula of “50% of what you contribute, up to 6% of pay,” on a $70,000 salary:
| You contribute | Your dollars | Employer adds | Total going in |
|---|---|---|---|
| 3% of pay | $2,100 | $1,050 | $3,150 |
| 6% of pay | $4,200 | $2,100 | $6,300 |
| 10% of pay | $7,000 | $2,100 | $9,100 |
Source: MoneyVerge illustration; your plan’s formula will differ.
Contributing 3% instead of 6% leaves $1,050 a year on the table in this example. That is an immediate 50% return on the extra money, before any investment growth. For context, Vanguard reports that across the plans it administers, the average employee deferral rate in 2025 was 7.6%, and the average total rate including employer money was 12.1%.
Vesting: when the match is actually yours
Money you defer from your paycheck, and money you roll in, is always 100% yours. Employer contributions can be on a vesting schedule. The law sets the slowest schedules allowed:
| Years of service | 3-year cliff | 6-year graded |
|---|---|---|
| 1 | 0% | 0% |
| 2 | 0% | 20% |
| 3 | 100% | 40% |
| 4 | 100% | 60% |
| 5 | 100% | 80% |
| 6 | 100% | 100% |
Source: Employee Fiduciary, 401(k) vesting schedules.
Employers can vest faster, and “safe harbor” plan contributions must vest immediately. You also become fully vested at the plan’s normal retirement age or if the employer terminates the plan. Leave before you’re vested and the unvested part is forfeited. If you’re planning a job change, check your vested percentage first. A few weeks can sometimes be worth thousands.
Traditional vs. Roth 401(k)
Many plans offer both. The $24,500 limit is shared between them. The trade-off is the same as with IRAs: a traditional contribution lowers your taxable income now, and withdrawals are taxed; a Roth contribution is taxed now, and qualified withdrawals are tax-free. Our Roth vs. traditional IRA guide walks through the tax-rate math with dollar examples.
Two things differ from IRAs. A Roth 401(k) has no income limit, so high earners who can’t contribute directly to a Roth IRA can use it. And since 2024, Roth 401(k) balances don’t require minimum distributions during your lifetime, matching Roth IRAs. Splitting contributions between both types is a reasonable hedge if you don’t know your future tax rate.
Getting money out early: loans, hardship and emergency withdrawals
A 401(k) is built to be hard to tap before 59½. Withdrawals before then are generally taxed plus a 10% additional tax unless an exception applies. Plans may offer these options:
| Option | How much | Taxes | Repaid? |
|---|---|---|---|
| 401(k) loan | Lesser of 50% of vested balance or $50,000 | None if repaid on schedule | Yes, usually within 5 years (longer for a home purchase), with interest paid to your own account |
| Hardship withdrawal | Amount of the “immediate and heavy” need (e.g. medical bills, tuition, preventing eviction, funeral costs) | Income tax, plus 10% if under 59½ unless exempt | No, and it can’t be rolled over |
| Emergency personal expense distribution (SECURE 2.0) | Up to $1,000 per year | Income tax, no 10% penalty | Optional, within 3 years |
Source: Guideline; Hartford Funds; IRS Notice 2024-55 summaries.
Vanguard reports that 13% of participants had a loan outstanding at the end of 2025, and 6% took a hardship withdrawal during the year, up from 5% in 2024.
The loan risk most people miss: if you leave your job with a loan outstanding, the unpaid balance can become a taxable distribution. You generally have until your federal tax-return due date to repay it, but some plans require repayment right away. Read your plan rules before borrowing, especially if your job isn’t secure.
If you’re reaching for retirement money because of card debt, compare other routes first. Our guide to paying off credit card debt covers balance transfers and payoff plans, and a separate emergency fund keeps you from needing the 401(k) at all.
The rule of 55
If you leave your employer in or after the calendar year you turn 55, you can take withdrawals from that employer’s plan without the 10% additional tax. Leaving at 54 and waiting until 55 doesn’t qualify, and it doesn’t apply to IRAs or old employers’ plans. Rolling that 401(k) into an IRA before you use it gives up this exception.
Rollovers when you change jobs
You usually have four choices: leave the money in the old plan (if allowed), roll it into your new employer’s plan, roll it into an IRA, or cash it out. Cashing out triggers income tax and, under 59½, usually the 10% additional tax.
- Direct rollover: the money moves straight from plan to plan or plan to IRA. No tax withholding, no deadline, no once-a-year limit. This is the cleanest route.
- Indirect rollover: the plan pays you, withholding 20% for taxes. You have 60 days to deposit the full amount, including the 20% from your own pocket, or the shortfall is taxed as a distribution.
Example: you roll over a $40,000 balance indirectly. You receive a $32,000 check. To avoid tax, you must deposit $40,000 within 60 days. The $8,000 withheld counts as tax already paid when you file your return. Roth 401(k) money should go to a Roth IRA; pre-tax money to a traditional IRA or new plan.
Fees: the cost you don’t see on a bill
401(k) fees come in three groups: plan administration (recordkeeping, legal, accounting), investment fees (by far the largest part, mostly fund expense ratios) and individual service fees (for example, a loan fee). The Department of Labor’s example shows why they matter:
| Starting balance | Years | Average return | Annual fees | Balance at retirement |
|---|---|---|---|---|
| $25,000 | 35 | 7% | 0.5% | $227,000 |
| $25,000 | 35 | 7% | 1.5% | $163,000 |
Source: U.S. Department of Labor, A Look at 401(k) Plan Fees.
A 1-percentage-point difference cut the ending balance by 28%. Your plan must give you an investment comparison chart before you first invest and every year after, plus quarterly statements showing fees taken directly from your account. Compare expense ratios in that chart. Broad index funds, like the S&P 500 funds many plans offer, are often among the cheapest options.
A simple 2026 checklist
- Find your match formula and contribute at least enough to get all of it.
- If you’re auto-enrolled, check your rate and investment. Default rates are often lower than you need.
- Turning 50, or 60–63, this year? Update your election to use the higher catch-up.
- Earned over $150,000 in FICA wages in 2025? Confirm your plan offers Roth so you keep catch-up eligibility.
- Check your vesting percentage before changing jobs.
- Review fund expense ratios once a year.
- Name or update your beneficiaries.
Frequently asked questions
What is the 401(k) contribution limit for 2026?
$24,500 in employee deferrals. Add $8,000 if you're 50 or older, or $11,250 instead if you're 60 to 63, if your plan allows catch-ups. Total contributions from you and your employer can't exceed $72,000, not counting catch-ups.
Does the Roth catch-up rule affect me?
Only if you're 50 or older and your FICA wages from your employer were over $150,000 in 2025. Then your 2026 catch-up contributions must be Roth. Your regular contributions are unaffected.
Can I contribute to a 401(k) and an IRA in the same year?
Yes. The limits are separate. Being covered by a 401(k) can limit whether a traditional IRA contribution is deductible, but not whether you can make it.
What happens to my 401(k) if I leave my job?
The vested balance is yours. You can usually leave it in the plan, roll it to your new employer's plan or an IRA, or cash it out. A direct rollover avoids withholding and taxes.
Is it better to take a 401(k) loan or a hardship withdrawal?
A loan is repaid with interest to your own account and isn't taxed if you repay on schedule. A hardship withdrawal is permanent, taxable and may carry a 10% penalty. The loan's main risk is leaving your job before it's repaid.
Do employer matches count toward my $24,500 limit?
No. The $24,500 applies only to your own deferrals. Employer contributions count toward the separate $72,000 total additions limit.
Sources
- IRS – 401(k) limit increases to $24,500 for 2026, IRA limit increases to $7,500 (IR-2025-111)
- Foley & Lardner – IRS announces 2026 retirement plan cost-of-living adjustments
- ASPPA – Roth catch-up contributions: final regulations and 415(c) interactions
- U.S. Department of Labor – A Look at 401(k) Plan Fees
- NAPA – Plan design drives record retirement participation (Vanguard How America Saves 2026)
- PLANSPONSOR – Vanguard: plan design, participant behavior trends remained strong in 2025
- Employee Fiduciary – 401(k) vesting schedules
- Guideline – What's the difference between a 401(k) loan and hardship withdrawal?
- Hartford Funds – How to tap retirement accounts before age 59½
- Fidelity – 401(k)-to-IRA rollover rules
- Thomson Reuters – IRS guidance on emergency personal expense distributions
- Pullman & Comley – SECURE Act 2.0 changes to required minimum distributions
Rates, fees and terms change often. Figures were checked in October 2026; confirm current details with the provider before you apply.