401(k) Deferral Limit Stands at $24,500 for 2026, With a $11,250 Catch-Up for Ages 60 to 63

The 401(k) deferral limit is $24,500 for 2026, and workers who are 60 to 63 years old can add a $11,250 catch-up contribution on top of it. The figures come from the Internal Revenue Service, which updates its retirement plan limits each year for inflation.

For households that are also watching grocery and restaurant bills, the numbers show how much room the tax code leaves for workplace savings and individual retirement accounts. The same IRS table covers IRAs, SIMPLE plans and the overall cap on plan contributions.

The $24,500 Deferral Limit

According to the IRS cost-of-living table, the 2026 elective deferral limit for a 401(k) is $24,500, up from $23,500 in 2025. The agency’s news release, issued Nov. 13, 2025, says the same limit applies to 403(b) plans, most governmental 457 plans and the federal Thrift Savings Plan.

State taxes also shape how far savings go, as a look at states with the heaviest tax burdens shows. The limit counts what an employee puts in from pay. The IRS notes that a plan may set a lower limit than the federal maximum, and that deferrals to more than one plan are added together when testing the cap. SIMPLE 401(k) plans have their own, lower limit of $17,000 for 2026, up from $16,500. Households still building a cash cushion may want to read about an emergency fund before raising their deferral, and a list of ways to save money fast offers ideas for freeing up cash.

The 401(k) is named for a section of the tax code. Wikipedia’s entry on the 401(k) says Section 401(k) was added to the Internal Revenue Code by the Revenue Act of 1978, and that the Roth version of the plan arrived with the 2006 tax year.

The $11,250 Catch-Up for Ages 60 to 63

Workers who are 50 and older can add a catch-up contribution in most 401(k), 403(b), governmental 457 and Thrift Savings Plan accounts. For 2026 that amount is $8,000, up from $7,500, which brings the total a worker can defer to $32,500, according to the IRS news release.

A higher figure applies to a narrow age group. Workers who are 60, 61, 62 or 63 can contribute an extra $11,250 instead, and the IRS says that amount is unchanged from the prior year. Added to the $24,500 limit, it allows up to $35,750 in deferrals for someone in that age range, as long as the plan allows catch-ups.

The IRS says a worker does not have to be behind on savings to use a catch-up. Financial planners often point to catch-up contributions as a tool for people in their 50s, and one recent list of money mistakes people over 50 make includes skipping them. Plans must permit the extra contributions, so a worker needs to check with the plan administrator. Retirees face their own choices too, as a piece on money moves planners say to avoid in the first year of retirement explains.

The $7,500 IRA Limit

Outside the workplace, the traditional and Roth IRA limit is $7,500 for 2026, up from $7,000. The IRA catch-up for people 50 and older is $1,100, up from $1,000, so an eligible saver can put in up to $8,600. Wikipedia’s IRA entry says individual retirement arrangements were created in 1974 under the Employee Retirement Income Security Act, and that the Roth IRA came from the Taxpayer Relief Act of 1997 and is named for Senator William V. Roth Jr.

Income rules decide whether a contribution can be deducted or made at all. The IRS release lists these ranges for 2026:

• The deduction for a traditional IRA phases out between $81,000 and $91,000 for single filers covered by a workplace plan.
• For married couples filing jointly, with the contributing spouse covered by a workplace plan, the phase-out runs from $129,000 to $149,000.
• Roth IRA eligibility phases out between $153,000 and $168,000 for single filers and heads of household, and between $242,000 and $252,000 for married couples filing jointly.

Total Limits and the Saver’s Credit

A separate cap covers everything that goes into one participant’s 401(k) account. The IRS says the total of employee deferrals, excluding catch-ups, plus employer matches and other employer contributions cannot exceed the lesser of 100 percent of pay or $72,000 in 2026. With catch-up contributions, the ceiling is $80,000, or $83,250 for ages 60 to 63. Pay above $360,000 cannot be counted when figuring contributions.

The IRS also lists income limits for the Saver’s Credit, a tax credit for lower-income savers. For 2026 the limits are $80,500 for married couples filing jointly, $60,375 for heads of household and $40,250 for single filers. A household that is stretching a grocery budget while setting money aside may qualify, and the IRS page on 401(k) contribution limits explains how the pieces fit together.

Fitting Savings Into a Household Budget

Maxing out a 401(k) at $24,500 means setting aside about $2,042 a month, a figure that is out of reach for many families. The limit is a ceiling, not a target, and most plans let workers pick a smaller percentage of pay. Advice on building a cash cushion often comes before retirement saving for households with little room in the budget.

Food is one of the larger and more flexible parts of a household budget, so meal planning and grocery habits can feed directly into savings.

The IRS says these figures are subject to cost-of-living adjustments, so the numbers change from year to year. The agency released the 2026 numbers on Nov. 13, 2025. Until new figures appear, the 2026 limits remain the ones that apply to contributions made this year, and the IRS pages above carry the full tables for anyone who wants to check a specific plan type.

This article was produced with AI assistance and edited for accuracy against the sources linked above.

Image: stevepb – CC0/Wikimedia Commons