Key takeaways
- The 2026 employee contribution limit is $24,500, plus catch-up contributions if you're 50 or older.
- Always contribute enough to get your full employer match.
- Starting in 2026, higher earners must make catch-up contributions as Roth.
A 401(k) lets you invest for retirement straight from your paycheck, often with free money from your employer.
2026 contribution limits
| Age | Employee limit | With catch-up |
|---|---|---|
| Under 50 | $24,500 | — |
| 50 to 59, or 64+ | $24,500 | $32,500 ($8,000 catch-up) |
| 60 to 63 | $24,500 | $35,750 ($11,250 catch-up) |
The same limits apply to 403(b) plans, most 457 plans and the federal Thrift Savings Plan. The total of employee and employer contributions is capped at $72,000 for 2026, not counting catch-up.
New in 2026: If your wages from that employer in the prior year were over $150,000, any catch-up contributions must go into a Roth 401(k).
Get the full match
Many employers match part of what you contribute, for example 50 cents per dollar up to 6% of your pay, or dollar for dollar up to 3% or 4%. Not contributing enough to get the full match is leaving part of your pay on the table.
Check your plan’s vesting schedule, too. Employer contributions may not fully belong to you until you’ve worked there a certain number of years.
Traditional or Roth 401(k)?
Many plans offer both:
- Traditional: Contributions lower your taxable income now; withdrawals are taxed in retirement.
- Roth: Contributions are taxed now; qualified withdrawals are tax-free.
Your employer match may go into the traditional side or, in some plans, the Roth side.
Choose your investments
If you’re not sure, a target-date fund close to your expected retirement year is a reasonable one-fund option. Otherwise, look for low-cost index funds in your plan’s lineup.
When you change jobs
You can usually leave your money in the old plan, roll it over to your new employer’s plan or roll it into an IRA. Cashing out typically triggers income taxes and, if you’re under 59½, a 10% penalty.
Increase your contribution over time
If you can’t contribute much now, use your plan’s auto-increase feature to raise your contribution by 1% each year, or bump it up every time you get a raise.
WalletJolly may earn a commission from links on this page. Rates, prices and rules mentioned are current as of Oct. 28, 2026 and can change. This article is general information, not financial, tax, insurance or legal advice.
