2026 401(k) limits and how much your match is worth

The 2026 401(k) limits

The IRS adjusts the limits for inflation each year. These apply to 401(k), 403(b) and most 457 plans and the federal Thrift Savings Plan:

Catch-up contributions are allowed on top of the total limit. Ages are as of December 31, 2026. Source: IRS Notice 2025-67.

Your limit is per person, not per plan: if you change jobs mid-year, contributions to both employers' plans count toward the same $24,500. Employer contributions are figured on pay up to $360,000, and the total limit is also capped at 100% of your pay.

Reaching the full $24,500 takes a large share of pay: 40.8% of $60,000, 27.2% of $90,000, and 16.3% of $150,000. Most people contribute less, so the limit matters mainly for higher earners and for people catching up later in their careers. The 401(k) limits are separate from IRA limits: you can also put up to $7,500 in an IRA in 2026 ($8,600 at 50 or older), though a workplace plan can limit how much of a traditional IRA contribution you may deduct.

The new Roth rule for catch-up contributions

Starting in 2026, if your Social Security (FICA) wages from the employer sponsoring the plan were more than $150,000 in 2025, any catch-up contributions you make in 2026 must go in as Roth: after tax now, tax-free later if you meet the Roth rules. Your first $24,500 can still be traditional. FICA wages are box 3 of your W-2.

The requirement comes from the SECURE 2.0 Act. The IRS delayed it through 2025 and issued final regulations in September 2025 that formally apply from 2027; for 2026, plans follow a reasonable, good-faith reading of the law. A plan that does not offer a Roth option cannot let affected employees make catch-up contributions at all, so it is worth checking how your plan handles it.

How employer matches work

A match is a percentage of what you contribute, up to a cap measured as a share of your pay. Two formulas are especially common:

• Safe harbor basic match: 100% of the first 3% of pay you contribute plus 50% of the next 2%. Contribute 5% and you get 4% of pay. Plans that use it skip some annual nondiscrimination testing, and in a traditional safe harbor plan the match vests immediately (automatic-enrollment safe harbor plans can require up to 2 years of service).
• 50% up to 6%: 50 cents per dollar on the first 6% of pay. Contribute 6% and you get 3% of pay.

Yearly amounts at the contribution rate that captures the full match. Matches are often calculated per paycheck.

The safe harbor formula is more generous per dollar: you earn a 100% instant return on the first 3% of pay. The 50% formula pays less in total and asks you to contribute more to get all of it. Below the cap, every percent you hold back costs match: on $90,000, contributing 3% instead of 6% under the 50% formula gives up $1,350 a year.

One catch: if your plan matches per paycheck and you hit the $24,500 limit before December, the match can stop with your contributions. Some plans make a year-end "true-up" to restore it; others do not.

What the full match adds up to

Take a 30-year-old earning $60,000 with a safe harbor match, getting 3% raises and earning 7% a year on investments (our calculator's default, a long-run assumption, not a promise). Here is the balance after 30 years at three contribution rates:

7% annual return, 3% yearly raises, paid every two weeks, no starting balance. In today's dollars, using 3.7% inflation (the latest 12-month CPI change), the 5% balance is about $249,346.

Moving from 3% to 5% costs $57,091 more of your own pay over 30 years but brings in $28,545 more of employer money and raises the final balance by $250,074. Contributing nothing forfeits the match entirely.

Vesting: when the match becomes yours

Money you contribute is always 100% yours. Employer matches can come with a vesting schedule, and leaving before you are fully vested forfeits the unvested part. The slowest schedules the law allows for matching contributions:

Many plans vest faster, and traditional safe harbor matches vest immediately. Your plan's summary plan description gives the schedule.

Traditional or Roth?

Most plans offer both. Traditional contributions come out before income tax, so they lower your tax now; withdrawals in retirement are taxed as income. Roth contributions come out after tax, and qualified withdrawals (after age 59½ and 5 years in the Roth account) are tax-free. Social Security and Medicare taxes apply to both.

For a single filer earning $60,000 in North Carolina, paid every two weeks, a 5% contribution is $115.38 a check. As traditional, it lowers federal withholding by $13.85 and state withholding by $4.00, so take-home pay falls by only $97.53. As Roth, take-home falls by the full $115.38.

Which is better depends mainly on whether your tax rate in retirement will be higher or lower than it is now. If you expect a lower rate later, traditional usually comes out ahead; if higher, Roth. Many people split between them. Check your own paycheck in the paycheck calculator, and see the full picture in the retirement calculator.