Quick takeaways
The 401(k) contribution limit for participants in 2026 is $24,500, up from $23,500 in 2025. Participants who are 50+ or older in the calendar year can save an additional $8,000 in catch-up contributions.
The extended catch-up contribution provision for savers aged 60–63 in the calendar year remains at $11,250 in 2026.
The combined employer and employee contribution limit for 2026 is $72,000, up from $70,000 in 2025.
Separate from the 401(k) contribution limit, the contribution limit to an IRA for 2026 is $7,500, up from $7,000 in 2025. IRA account owners who are age 50 or older in the calendar year can save an additional $1,100 in catch-up contributions.
Making your retirement contribution plan for 2026? Increased limits allow you to save more this year than last year.
No matter where you are on your path to retirement, contributing to a 401(k) or an IRA (or both) can help you plan for your financial future. While these types of contributions can come with significant tax advantages, the Internal Revenue Service (IRS) limits how much you can contribute each year. For 2026, those limits went up again—giving you even more opportunities to save for the future.
There are a lot of factors that can help you determine how much you should save for retirement, including your income, where you live, and what your personal retirement goals look like. But knowing the maximum allowable contribution limit can be the first step to help optimize your retirement savings strategy.
Below we’ll take a deep dive on the 2026 contribution limits, including the increased caps for standard 401(k)s, Starter 401(k) plans, and IRAs.
What are retirement contribution limits?
Contribution limits cap how much employees and employers can contribute to a retirement plan in a given year.1 The IRS evaluates these limits annually based on factors such as inflation and increases in the cost of living. The limits were established to help create fairness in retirement savings, ensuring that higher income earners don’t benefit more from a retirement savings plan than those with a more modest salary.
Depending on your age, you may be able to contribute more to your retirement plan. For example, most 401(k) plans and all IRAs allow for catch up contributions for people aged 50 and older in the calendar year. Catch up contributions allow those who are closer to retirement to save more and “catch up” if they’re behind on their retirement savings goals.
“Rising contribution limits give workers more flexibility to keep pace with inflation and stay on track for retirement. They also allow employers to match more, which can meaningfully increase employee loyalty and satisfaction. With the cost of living still elevated, the ability to save a little more each year can make a real difference over time.”
Kevin Busque, Head of Gusto Retirement
Employee contribution limits versus employer contribution limits
Some 401(k) plans allow both employees and employers to contribute to an employee’s retirement account. These contributions are tracked separately and follow different IRS limits. This matters because employer contributions don’t count toward the employee deferral contribution limit—so when an employer makes a contribution to the plan, the employee can save more than the maximum they’re allowed to contribute on their own.
401(k) and IRA contribution limits in 2026
Employee contribution limits
Employee deferral contribution limits for 401(k) plans increased for 2026. Employees can now contribute up to $24,500 in 2026, aggregated across all 401(k) plan contributions for the calendar year, an increase from $23,500 in 2025. Note that employees can never contribute more than their total compensation for the year.
Employee contribution limits for those age 50 or older
As noted above, people aged 50 or older in the calendar year are eligible to make additional catch-up contributions to their 401(k) account.
For 2026, the base catch-up limit for people aged 50-59 in the calendar year increased to $8,000. Those eligible for the extended catch-up (ages 60-63 in the calendar year) now have a catch-up limit of $11,250.
Note: these ages apply to the calendar year in which the participant attains the particular age. For example, a participant turning age 50 on December 31st of the calendar year is eligible to make catch-up contributions in that year, however, a participant turning age 64 on the same day is not eligible for the extended catch-up provision in that calendar year.
Age in 2026 | Total employee deferral contribution limit* |
Under age 50 | The normal deferral limit of $24,500 |
Between ages 50–59 | The normal deferral limit of $24,500 plus the standard catch-up of $8,000 for a total of $32,500 |
Between ages 60-63 | The normal deferral limit of $24,500 plus the extended catch-up of $11,250 for a total of $35,750 |
Age 64 and over | The normal deferral limit of $24,500 plus the standard catch-up of $8,000 for a total of $32,500 |
*Is always the lesser of 100% of eligible compensation or the normal deferral limit
Employer contribution limits
In 2026, the combined limit for employee and employer contributions to a 401(k) is $72,000 or 100% of the employee’s salary, whichever is lower. The combined limit is $80,000 if the employee is age 50–59 or 64+ and making catch-up contributions.
Employer contributions don’t impact the employee annual deferral contribution limit. That’s because the IRS has a higher combined limit for employee and employer contributions. These higher contribution limits also apply to those contributing to a Solo 401(k), who are eligible to make both employee and employer contributions.
Starter 401(k) contribution limits
In 2026 the annual contribution limit for a Starter 401(k) is $6,000 for employee deferrals plus $1,100 in catch-up contributions for employees aged 50. Starter 401(k)s do not permit employer contributions.
2026 marks the third year of Starter 401(k) plans. These plans were created to encourage more employers to offer retirement benefits to their employees. By design, Starter 401(k) plans automatically satisfy the annual compliance tests and have fewer employer requirements, but have lower contribution limits than a standard 401(k).
Limits for highly-compensated employees (HCEs)
If you are a more than 5% owner (or a family member of a more than 5% owner under family attribution rules), or your annual earnings exceed a certain threshold, the IRS may designate you as a highly compensated employee (HCE). HCEs are subject to additional limitations when it comes to retirement contributions to ensure that a company’s retirement plan doesn’t unfairly benefit the employees making the most money. For example, the average HCE’s deferral contribution generally can’t exceed 2% of the average non-HCEs’ deferral contributions.
In 2026, the threshold to be considered an HCE remains at $160,000 earned in the prior year. Note that this restriction does not apply to Starter 401(k) plans as they are not subject to ADP nondiscrimination testing due to the reduced deferral limit.
However, if your employer sponsors a safe harbor 401(k) plan, HCEs might not be subject to such strict standards. Safe harbor 401(k) plans automatically satisfy most IRS nondiscrimination testing as long as specific criteria are met, letting highly compensated employees (HCEs) maximize contributions to their 401(k) account without risk of penalty.1
Note that there are other limits that apply to 401(k) plans, such as the annual compensation cap and the employer deduction limit.
IRA contribution limits
Traditional and Roth IRA contribution limits
The 2026 limit on annual contributions to an IRA is $7,500, up from $7,000 in 2025. The 2026 catch‑up contribution limit for individuals aged 50 and over increased slightly to $1,100 in 2026, up from $1,000 in the previous year. These limits are separate from the contribution limits for 401(k) plans.
In addition to the contribution limits, the limits to deduct a traditional IRA contribution or make a Roth IRA contribution also changed. You can find more information here.
SEP IRA contribution limits
SEP IRA plan contribution limits for 2026 are $72,000, up from $70,000 in 2025. Only employers can contribute, and their contributions can’t exceed 25% of the employee’s compensation for the applicable tax year. These flexible IRA plan contributions are tax-deferred, have larger contribution limits, and can have fewer administration requirements than other types of retirement plans.
2026 retirement account contribution limits
To recap, here’s an overview of the 401(k) contribution limits for 2026.
2025 | 2026 | |
Standard 401(k) | ||
Employee contribution limit | $23,500 | $24,500 |
Employee + employer contribution limit | $70,000 | $72,000 |
Catch-up contribution limit | $7,500 | $8,000 |
Extended catch-up contribution limit for 60-63 year olds | $11,250 | $11,250 |
Starter 401(k) | ||
Employee contribution limit | $6,000 | $6,000 |
Employer contribution limit | Not allowed | Not allowed |
Catch-up contribution limit | $1,000 | $1,100 |
Traditional and Roth IRA | ||
Employee contribution limit | $7,000 | $7,500 |
Catch-up contribution limit | $1,000 | $1,100 |
SEP IRA contribution limit | $70,000 | $72,000 |
May be adjusted annually to account for IRS cost-of-living adjustments. Learn more.
401(k) contributions FAQ
We know there’s a lot more to consider than annual contribution limits when determining how much to save for retirement. Below we’ve answered a few frequently asked questions about 401(k) plans that might help you choose how to approach your retirement goals this year.
Should I max out my 401(k)?
Maxing out your 401(k) means contributing the maximum employee contribution permitted by the IRS in a given year. If you’re able to contribute that amount, that’s great! By saving more, you can reap the rewards of a 401(k), like reducing your taxable income and earning compound interest,2 which can help grow your retirement savings over time. Remember—it’s always a good idea to speak with an investment or tax professional to determine your personal retirement strategy.
Can I contribute to more than one 401(k)?
Yes, you can contribute to more than one 401(k), but be aware that your annual employee deferral contribution limit is the total of all deferrals made to your 401(k) accounts, plus a few others. That means in 2026, you can contribute up to $24,500 across all your 401(k) accounts, not $24,500 to each (limit also includes employee contributions to 403(b)s, Salary Reduction Simplified Pension Plans (SAR-SEPs), and Savings Incentive Match Plans for Employees (SIMPLE-IRAs)).
What can I do if I over-contribute to my 401(k)?
If you contribute too much to your 401(k) and catch it in time, you can fix the mistake. You’ll need to request a corrective distribution, which means distributing the excess funds (and any amounts earned thereon) out of the account. If you have accounts outside of Gusto that must be included in your annual deferral limit, you can report these outside contributions to Gusto as long as they are reported by March 1 of the following year. The corrective distribution must be made by the employee’s tax filing due date without extensions (generally 4/15). Gusto helps savers avoid exceeding their deferral contribution limit by automatically adjusting contribution rates as they near the limit.
1In general, Safe Harbor 401(k) plans automatically satisfy Top Heavy, ADP, and ACP testing requirements provided they remain safe harbor for the full plan year and don’t make any non-safe harbor employer contributions.
2This information is for illustrative purposes only and does not represent the actual return you would accrue. Information shown here does not account for common factors that affect the value of your account balance over time such as gains, losses, distributions, additional contributions, etc., and is not intended to constitute investment advice nor an assurance or guarantee of future performance. Investing involves risk and investments may lose value, including loss of principal.
