2026 401(k) Contribution Limits
| Parameter | 2026 Limit |
|---|---|
| Employee Elective Deferral | $23,500 |
| Catch-Up (Age 50+) | $7,500 |
| Total Employee (Age 50+) | $31,000 |
| Total Annual Addition (415(c)) | $70,000 |
| Compensation Limit | $345,000 |
How Employer Matching Works
Employer matching is essentially free money added to your retirement savings. The most common match structures are:
- Dollar-for-dollar up to X% — Employer matches 100% of your contribution up to a percentage of salary (e.g., 100% match on first 3%)
- 50 cents on the dollar — Employer matches 50% of your contribution up to 6% of salary (most common)
- Non-elective contribution — Employer contributes a flat percentage regardless of your contribution (e.g., 3% of salary)
Rule of thumb: Always contribute at least enough to capture the full employer match. If your employer matches 50% up to 6%, contribute at least 6% — otherwise you're leaving free money on the table.
Traditional vs Roth 401(k)
| Feature | Traditional 401(k) | Roth 401(k) |
|---|---|---|
| Tax on contributions | Pre-tax (deductible) | After-tax |
| Tax on withdrawals | Taxed as income | Tax-free |
| RMDs | Yes (age 73) | Yes (age 73) |
| Best for | High earners now, lower bracket later | Expect higher taxes in retirement |
Frequently Asked Questions
What happens to my 401(k) if I change jobs?
You have several options: leave it with your former employer (if balance >$5,000), roll it into your new employer's plan, roll it into an IRA, or cash out (not recommended — taxes + 10% penalty if under 59½). Rolling over preserves the tax-deferred status with no penalties.
Can I contribute to both 401(k) and IRA?
Yes. The 401(k) and IRA limits are separate. In 2026, you can contribute $23,500 to a 401(k) plus $7,000 to an IRA. However, your Traditional IRA tax deduction may be limited if you're covered by an employer plan and your income exceeds $79,000 (single) or $126,000 (MFJ).
How much should I contribute to my 401(k)?
At minimum, contribute enough to get the full employer match. Financial advisors typically recommend saving 15% of gross income for retirement (including employer match). Use our calculator to see how different contribution rates affect your projected balance.
Related Calculators & Guides
- RMD Calculator — Required Minimum Distributions after 73
- Roth Conversion Calculator — Compare conversion strategies
- 2026 401(k) & IRA Contribution Limits Guide
- How Employer Matching Doubles Your Savings
- Roth vs Traditional IRA Comparison
- All Retirement Calculators