Each year the IRS adjusts the limits of retirement plans to reflect inflation and changes in the law. For tax year 2026, the headline numbers for 401(k), 403(b), solo 401(k), and IRA accounts increase modestly — but there’s also a major new rule for high earners that affects how catch-up contributions are handled.
Below you’ll find the full set of updated limits for 2026, a comparison with 2025, and guidance on what these changes mean for you.
If your company offers a 401(k) retirement plan program, it would be a good idea to take advantage of it and boost your contributions. That’s why we’re sharing the latest 401k contribution limits (and age limits for catch-up contributions).
Even if you’re self-employed, you can likely leverage a solo 401k to lower your taxable income and save for retirement. If you don’t have a solo 401k plan yet, check it out Best places to open a 401k solo.
No matter the path, you have to know the limits!
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2026 401k Contribution Limits
Below are the 2026 401k contribution limits. This has been announced before IRS On November 13, 2025.
The employee deferral limit increased by $1,000 and the total combined contribution limit increased by $2,000 compared to 2025. There is a new “higher” catch-up contribution for employees ages 60, 61, 62, and 63 who participate in these plans.
|
Type of contribution |
end |
|---|---|
|
Maximum employee elective deferral. |
$24,500 |
|
Employee catch-up contribution (if 50 years of age or older) |
$8000 |
|
Employee compensation contribution (if age 60-63) |
$11,250 |
|
Joint contribution of the employee and the employer |
$72,000 |
This means that for savers under 50, you can defer $24,500 per year, or $72,000 total. If you’re over 50, you can save $32,500 annually, and if you’re 60 to 63, you can contribute $35,750.
2025 401k Contribution Limits
Below are the 2025 401k contribution limits. This has been announced before IRS On November 1, 2024.
The employee deferral limit increased by $500 and the total combined contribution limit increased by $1,000 compared to 2024. However, starting in 2025, there is a new “higher” contribution for employees ages 60-61 and 62-63 who participate in these plans.
|
Type of contribution |
end |
|---|---|
|
Maximum employee elective deferral. |
$23,500 |
|
Employee catch-up contribution (if 50 years of age or older) |
$7500 |
|
Employee compensation contribution (if age 60-63) |
$11,250 |
|
Joint contribution of the employee and the employer |
$70,000 |
This means that for savers under 50, you can defer $23,500 per year, or $70,000 total. If you’re over 50, you can save $31,000 per year, or a total limit of $77,500. If you’re 60 to 63 years old, you can contribute $34,750, or a total limit of $81,250.
Last year’s contribution limits
If you’re looking for a reference to last year’s limits, here they are:
2024 401k contribution limits
Below are the 2024 401k contribution limits. This has been announced before IRS On November 1, 2023.
The employee deferral limit increased by $500 and the total combined contribution limit increased by $3,000 compared to 2023.
|
Type of contribution |
end |
|---|---|
|
Maximum employee elective deferral. |
$23,000 |
|
Employee catch-up contribution (if 50 years of age or older) |
$7500 |
|
Joint contribution of the employee and the employer |
$69,000 |
This means that for savers under 50, you can defer $23,000 per year, or $69,000 total. If you’re over 50, you can save $30,500 per year, or a total limit of $76,500.
2023 401k Contribution Limits
Below are the 2023 401k contribution limits. This has been announced before IRS On October 21, 2022.
The employee deferral limit increased by $2,000 and the total combined contribution limit increased by $5,000 compared to 2022.
|
Type of contribution |
end |
|---|---|
|
Maximum employee elective deferral. |
$22,500 |
|
Employee catch-up contribution (if 50 years of age or older) |
$7500 |
|
Joint contribution of the employee and the employer |
$66,000 |
This means that for savers under 50, you can defer $22,500 per year, or $66,000 total. If you’re over 50, you can save $30,000 per year, or a total limit of $73,500.
401k contribution limits for 2022
Below are the 2022 401k contribution limits. This has been announced before IRS On November 4, 2021.
The employee deferral limit increased by $1,000 and the total combined contribution limit increased by $3,000 compared to 2021.
|
Type of contribution |
end |
|---|---|
|
Maximum employee elective deferral. |
$20,500 |
|
Employee catch-up contribution (if 50 years of age or older) |
$6500 |
|
Joint contribution of the employee and the employer |
$61,000 |
401k contribution limits for 2021
Here are the 2021 401k contribution limits. This has been announced before IRS On October 26, 2020.
The employee deferral limit remained the same and the total combined contribution limit increased by $1,000 compared to 2020.
|
Type of contribution |
end |
|---|---|
|
Maximum employee elective deferral. |
$19,500 |
|
Employee catch-up contribution (if 50 years of age or older) |
$6500 |
|
Joint contribution of the employee and the employer |
$58,000 |
401k contribution limits for 2020
Here are the 401k contribution limits for 2020.
The employee deferral limit increased by $500 and the total combined contribution limit increased by $1,000 compared to 2019.
|
Type of contribution |
end |
|---|---|
|
Maximum employee elective deferral. |
$19,500 |
|
Employee catch-up contribution (if 50 years of age or older) |
$6500 |
|
Joint contribution of the employee and the employer |
$57,000 |
401k contribution limits for 2019
Below are the 2019 401k contribution limits. This was announced by the IRS on November 1, 2018.
The employee deferral limit increased by $500 and the total combined contribution limit increased by $1,000.
|
Type of contribution |
end |
|---|---|
|
Maximum employee elective deferral. |
$19,000 |
|
Employee catch-up contribution (if 50 years of age or older) |
$6000 |
|
Joint contribution of the employee and the employer |
$56,000 |
401k contribution limits for 2018
Below are the 2018 401k contribution limits. Remember, you must defer your employee account to the account by December 31, 2018. However, if you are self-employed, you can fund your employer profit-sharing contribution at any time before filing your tax return.
|
Contribution type |
end |
|---|---|
|
Maximum employee elective deferral. |
$18,500 |
|
Employee catch-up contribution (if 50 years of age or older) |
$6000 |
|
Joint contribution of the employee and the employer |
$55,000 |
Remember, for those with a solo 401k, you can set up your employee’s elective deferral to be either Roth or traditional. However, the employer contribution is always traditional.
401k individual contribution deadlines
If you’re looking at these contribution limits for a solo 401k, it’s important to note that you also have to contribute by certain deadlines.
A standalone 401k has two sets of deadlines: the employee contribution deadline (i.e., your optional contribution), and the matching employer contribution deadline (i.e., what your business puts into the 401k).
For your Employee Elective Contribution, you must usually make your contribution by December 31. If you are an S-Corp and on payroll, you must elect to make and pay this contribution by December 31. If you are a sole proprietorship or a single-member LLC, you must still elect to make your contribution by December 31, but your contribution can be made up until the personal tax filing deadline (usually April 15). Sound strange? It’s a bit strange, but the nuance comes down to the type of tax return you file (S-Corp return vs. Schedule C on your personal return).
For the employer contribution, you must make your contribution by the tax filing deadline for your company (or personal return if you are filing your contribution on Schedule C). This could be March 15 or September 15 for S-Corps, or April 15 or October 15 for those filing personal returns.
Benefits of contributing to a 401k
One of the main benefits of 401(k) plans offered by some employers is matching employee contributions up to a certain limit of the employee’s income (between 3% and 6% of annual income is a common percentage).
In this case, the employee must contribute at least as much as this amount to essentially tap into the free money, even if it means reducing contributions to other accounts such as IRAs or general investment accounts.
Another important advantage of most 401(k) plans is that they are tax-deferred investment vehicles, meaning employees do not have to pay income tax on the money they earned during that year and contributed to the 401(k), reducing their total income tax bill for the year. Many employers also offer a Roth 401k option, but many employees don’t know about it or choose it.
Finally, these plans also provide a useful retirement savings target. Although employees generally must save more than the limits, they provide a set amount of targeted savings to meet the minimum annually.
Withdrawals from 401k plan
Since tax-deferred 401(k) contributions are not taxed as income in the year the contribution is made (the amount is deducted on the employee’s annual income tax returns), withdrawals are taxed instead. However, if an employee chooses a Roth 401(k), contributions are taxed before they are made and can then be withdrawn at retirement tax-free.
The tax rate that will be applied to these withdrawals is the income tax rate that applies to the account holder during the year of withdrawal. This is generally beneficial because most people will have less taxable income during their retirement years than they did when they worked, which means the effective tax rate on the amount withdrawn will be lower.
401(k) owners must be at least 59½ years old or completely and permanently disabled to be able to withdraw the funds in their accounts without tax penalties.
If they are younger than this age, they will pay a 10% penalty tax on the amount withdrawn in addition to the ordinary income tax due on the amount.
There are several limited exceptions to this 10% penalty, including the death of an employee, qualifying district court orders, and unpaid medical expenses that exceed 7.5% of the employee’s adjusted gross income.
Finally, account holders must begin making at least the required minimum withdrawals, which the IRS determines using the life expectancy table, when the account holder turns 70, unless they are still working.
A 50% penalty applies to the minimum withdrawal if it is not taken for that tax year.
Final thoughts
401(k) plans are a valuable tool to save for retirement, and one that many employees do not fully utilize, especially if their employer will match their contributions. This is true even if you have a related 403b retirement plan.
Annual contribution limits are significantly higher than those for individual retirement accounts (IRAs) while allowing for the same tax deferral benefits, and they provide an excellent first step for employees to save annually for a secure retirement.
Additionally, contribution limits tend to increase each year, allowing you to save more money for retirement.
Do you contribute to a 401(k)? Why or why not?
Editor: Clint Proctor
Reviewed by: Ohan Kaekchian, Ph.D., CFP®
The post 401k Contribution Limits and Income (Annual Guide) appeared first on The College Investor.
