A 403(b) plan is a tax-advantaged retirement savings plan designed for employees of certain tax-exempt organizations, such as public schools, colleges, universities, hospitals, and religious organizations. The plan allows eligible employees to save for retirement by making pre-tax contributions, reducing their taxable income and providing tax-deferred growth on their investments.
However, like all similar retirement plans (401k or IRA), there are contribution limits on how much you can contribute each year. Here are the limits for 2025 and 2026, and a basic guide to how 403b contribution limits work.
2026 403(b) Contribution Limits
The 403b contribution limits for 2026 are as follows. This was announced by the US IRS in Notice 2025-67(PDF file).
|
Contribution type |
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 |
2025 403(b) Contribution Limits
The 403b contribution limits for 2025 are as follows. Note the change in catch-up contribution limits starting in 2025.
|
Contribution type |
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 |
Contribution limits for previous years
If you’re looking for a reference to last year’s limits, here they are:
2024 403(b) Contribution Limits
The 403b contribution limits for 2024 are:
|
Contribution type |
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 403(b) Contribution Limits
The 403b contribution limits for 2023 are:
|
Contribution type |
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 |
2022 403b Contribution Limits
This year was the first year that inflation actually caused contribution limits to rise.
|
Contribution type |
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 |
2021 403b Contribution Limits
|
Contribution type |
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 |
2020 403b Contribution Limits
|
Contribution type |
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 |
Understanding 403(b) contribution limits
There are three main types of contributions made to a 403b plan:
- Elective deferrals for employees: The employee chooses to contribute a portion of his or her salary to the plan.
- Employer contributions: An employer may choose to contribute to an employee’s account, usually through a matching program.
- Non-elective contributions: These are contributions made by the employer on behalf of the employee, regardless of whether the employee contributes or not.
Elective deferrals for employees
In 2026, the maximum amount an employee can contribute to a 403b plan through elective deferrals is $24,500. This limit applies to all employees, regardless of their age or years of service.
Employer contributions
There is no set limit on employer contributions to a 403b plan. However, total combined contributions, including employee elective deferrals and employer contributions, are subject to a limit.
Total combined contributions
Total combined contributions to a 403b plan in 2026 cannot exceed the lesser of:
- 100% of the employee’s compensation for the year, or
- $72,000
This limit includes employee elective deferrals, employer contributions, and nonelective contributions.
Catch-up contributions for individuals ages 50 and older
Employees age 50 or older are eligible to make additional contributions to their 403b plan.
In 2025, there is an additional “higher” contribution for individuals aged 60-63. You can contribute an additional $11,250, making your total contribution through elective deferrals $34,750.
Factors Affecting 403(b) Contribution Limits
There are other factors that affect 403b contribution limits, some of which are unique to 403b plans.
The employee’s age
As mentioned previously, employees age 50 or older can make additional contributions, increasing their overall contribution limit. In 2025, the lifetime catch-up contribution is $7,500 and amounts to $11,250. In 2026, the catch-up will increase to $8,000 but the upper level is still $11,250.
Years of service
Certain employees with 15 or more years of service at a qualifying organization may be eligible for an increased contribution limit. This is unique to 403b plans.
The additional amount is up to $3,000 per year, with a maximum lifetime increase of $15,000. This is subject to specific plan provisions, so employees should refer to their plan documents for eligibility and rules.
The specific amount you can contribute may be reduced based on your previous contributions to your employer’s plans. You should check your plan before taking advantage of this option.
compensation
The maximum contribution depends on the employee’s included compensation. Comprehensive compensation refers to the total taxable income an employee receives from the employer, which is used to determine the maximum allowable contribution. You cannot contribute more than 100% of your included compensation.
Coordination with other retirement plans
Employees who participate in multiple retirement plans, such as 403b and 401k, should be aware of combined contribution limits. The total amount contributed to all plans cannot exceed the individual limits for each plan type.
How to Maximize Your 403(b) Contributions.
Maximizing your 403b is a great way to build wealth over the long term. However, depending on your ability, this may be difficult to do at first. Here are some tips to try to maximize your 403b contributions.
Planning for the future
To get the most out of your 403b plan, it’s essential to plan ahead and evaluate your financial goals. Determine how much you can afford to contribute and adjust your contributions as needed to reach your retirement savings goals.
Take advantage of employer matching
If your employer offers a matching contribution, try to contribute at least enough to get the full contribution. This is essentially free money, and it can significantly boost your retirement savings.
Review your contribution limits annually
Contribution limits may change due to cost of living adjustments announced by the IRS. In fact, over the past few years, contribution limits have risen dramatically. Review your contribution limits each year and adjust your contributions accordingly to maximize potential savings.
Final thoughts
Understanding and maximizing 403b contribution limits is crucial to a successful retirement savings plan. By staying aware of the various factors that affect your contribution limits and taking advantage of opportunities to increase your savings, you can build a solid foundation for a comfortable retirement.
Frequently asked questions
Here are some of the most frequently asked questions about 403(b) plans and contribution limits.
- What is the maximum 403b contribution for 2025?
The employee elective deferral limit for 2025 is $23,500. For employees age 50 or older, they can make an additional contribution of $7,500. If you are 60 to 63 years old, the maximum compensation is $11,250. The overall total limit is $70,000. - Can I contribute to both a 401k and 403b plan?
Yes, you can contribute to both plans, but combined contributions cannot exceed the individual limits for each plan type. - Do employer contributions count toward the 403b contribution limit?
Employer contributions do not count toward the employee’s elective deferral limit but are included in the total combined contribution limit. - How do catch-up contributions work for employees aged 50 and over?
Employees age 50 or older can contribute an additional $7,500 in catch-up contributions to their 403b plan in 2025, amounting to $11,250 if they are between the ages of 60 and 63, bringing the total elective deferral limit to $34,750. - Can I increase my 403b contribution limit if I have 15 years of service?
Certain employees with 15 or more years of service at a qualifying organization may be eligible for an increased contribution limit of up to $3,000 per year, with a maximum lifetime increase of $15,000.
Editor: Chris Mueller
Reviewed by: Ohan Kaekchian, Ph.D., CFP®
The post 403(b) Contribution Limits for 2025 and 2026 appeared first on The College Investor.
