2026 limits at a glance
For 2026, the IRS raised the employee contribution limit for 401(k), 403(b) and most 457 plans to $24,500. The limit for traditional and Roth IRAs rose to $7,500. Workers aged 50 and over can make additional catch-up contributions to both, and a higher "super catch-up" applies to 401(k) savers aged 60 to 63. Always check the IRS website for the latest figures.
Why maxing out matters
Contributions to a traditional 401(k) reduce taxable income at your marginal rate. A worker in the 22% bracket who contributes $10,000 lowers federal tax by about $2,200. Roth accounts work the other way: no deduction now, but qualified withdrawals in retirement are tax-free.
Don't miss the employer match
Many employers match part of your contributions, for example 50% of what you contribute up to 6% of salary. That's an instant 50% return. At minimum, contribute enough to get the full match.
How much could it grow?
Using our compound interest calculator: $500 a month for 30 years at a 7% average annual return grows to roughly $600,000, of which only $180,000 is your own contributions. The rest is compound growth. Starting ten years later with the same monthly amount gives only about $260,000.
Roth IRA income limits
Roth IRA contributions phase out above certain income levels, which are adjusted each year. Higher earners sometimes use a "backdoor" Roth strategy; consult a professional before doing so.
Increasing contributions painlessly
Raise your contribution rate by 1% each year or whenever you get a raise. You'll barely notice the difference in your paycheck, but over decades it can add tens of thousands of dollars.
Fees matter
Expense ratios of 1% versus 0.1% can reduce a retirement balance by a large amount over 30 years. Low-cost index funds are a common choice inside retirement accounts.
Disclaimer
This article is educational and not financial advice. Investment returns aren't guaranteed and markets can fall.
Frequently asked questions
What is the 401(k) limit for 2026?
$24,500 for employee contributions, plus catch-up contributions for those 50 and older.
What is the IRA limit for 2026?
$7,500, plus a catch-up contribution for those 50 and older.
Should I contribute enough to get my employer match?
Yes, it's effectively free money.
How much does $500 a month grow in 30 years?
About $600,000 at a 7% average annual return.