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401(k) contribution limits 2026: IRS increases savings cap
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The IRS has announced new 401(k) contribution limits for 2026.
In its release on Thursday, the agency increased the employee deferral limit to $24,500 next year, up from $23,500 in 2025. The change applies to 401(k)s, 403(b)s and most 457 plans, along with the federal Thrift Savings Plan.
The IRS also unveiled 2026 catch-up contribution limits for savers age 50 and older, new individual retirement account savings limits and higher income thresholds for Roth IRA contributions.
Starting in 2026, the 401(k) catch-up contribution limit will rise to $8,000 for savers 50 and older, from $7,500 in 2025. But investors aged 60 to 63 can instead save an extra $11,250, based on changes enacted via Secure 2.0. That figure is unchanged from 2025.
Both amounts are in addition to the $24,500 deferral limit for 2026.
In 2024, only 14% of participants maxed out their 401(k)s, according to Vanguard’s 2025 How America Saves report, which was based on more than 1,400 qualified plans and nearly 5 million participants. The average combined savings rate, including employer deposits, was an estimated 12%, according to the same report.
A separate report found the average 401(k) savings rate, including employee and employer contributions, was a combined 14.2% during the second quarter of 2025, according to a Fidelity Investments analysis of more than 25,000 corporate plans and 24.6 million participants.
The IRS announcement comes hours after President Donald Trump signed into law a funding bill to end the longest federal government shutdown in U.S. history. It also comes roughly a month after the agency released dozens of inflation adjustments for 2026, including federal income tax brackets, higher capital gains brackets and provisions impacting families, among others.
