IRS Announces New 401(k) Contribution Limits for 2026

The IRS recently unveiled updates to the 401(k) contribution limits for 2026.

In a release on Thursday, the agency increased the deferral limit for employees, raising it from $23,500 in 2025 to $24,500 next year. This adjustment impacts 401(k), 403(b), and most 457 plans, as well as federal thrift savings plans.

Additionally, the IRS disclosed the catch-up contribution limits for those aged 50 and older, newly adjusted individual retirement account savings limits, and elevated income thresholds for Roth IRA contributions set for 2026.

For catch-up contributions, those aged 50 and older will see their limit increase from $7,500 in 2025 to $8,000. However, individuals between the ages of 60 and 63 have the option to save an additional $11,250, thanks to provisions from Secure 2.0. Notably, this figure will remain stable after 2025.

It’s worth mentioning that both of these catch-up contributions will be added to the 2026 deferral limit of $24,500.

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In 2024, only 14% of participants reported that they maxed out their 401(k) contributions, as outlined in Vanguard’s “How America Saves” report based on over 1,400 eligible plans and nearly 5 million participants. The average savings rate, including employer deposits, was around 12% according to the report.

Fidelity Investments found that the total average savings rate for a 401(k), considering both employee and employer contributions, was around 14.2% during the second quarter of 2025 from their analysis of more than 25,000 corporate plans and 24.6 million participants.

The IRS announcement followed shortly after President Donald Trump signed a funding bill, effectively ending the longest federal government shutdown in U.S. history. This news comes a month after the agency announced various inflation adjustments for 2026, which include federal income tax ranges and elevated capital gains thresholds, among other changes.