401(k) Contribution Limits

For 2026 the IRS employee elective-deferral limit is $24,500, up from $23,500 in 2025. This is the maximum you can contribute from your own paycheck across the year if you are under 50. It applies to 401(k) plans and, with the same dollar figure, to 403(b), most governmental 457(b) plans, and the federal Thrift Savings Plan. The limit is per person, not per plan, so if you contribute to two employers' plans in the same year, your combined personal deferrals still cannot exceed the single annual limit.

This $24,500 figure is for the 2026 tax year only. The IRS adjusts the limit periodically for inflation, which is why it has stepped up over recent years. Before you set your payroll deferral percentage, confirm the current-year number on the IRS website, because it can change from one year to the next.

If you are 50 or older at any time during 2026, you can contribute an additional catch-up of $8,000 on top of the standard $24,500 deferral. That brings the most you can personally defer to $32,500 for the year. The catch-up exists so people closer to retirement can accelerate their savings, and you qualify based on your age during the calendar year, not on a specific birthday.

One change worth knowing for 2026: if your wages from the employer sponsoring the plan exceeded $150,000 in the prior year, the law now requires your catch-up contributions to go into a Roth (after-tax) account rather than a pre-tax one. The dollar amount of the catch-up does not change, only where it lands. Plan rules vary on how this is administered, so check with your plan if it applies to you. Walnut is not a tax advisor.

SECURE 2.0 added a larger catch-up specifically for workers who are 60, 61, 62, or 63 during the year. For 2026 that higher catch-up is $11,250, and it replaces the standard $8,000 age-50 catch-up rather than adding to it. So someone who is 62 in 2026 can contribute $24,500 of regular deferrals plus $11,250 of catch-up, for a personal total of $35,750.

The higher catch-up applies only in the years you are 60 through 63. Once you turn 64, you drop back to the standard catch-up amount. Not every plan has adopted the feature in exactly the same way, so confirm that your plan offers it before you count on it, and remember these are 2026 figures that the IRS updates each year.

The $24,500 employee limit (plus any catch-up) covers only the money you defer from your own pay. Your employer's matching contribution and any profit-sharing it adds are separate and do not reduce how much you can personally contribute. A generous match does not eat into your room to defer, which is why financial guides so often say to at least contribute enough to capture the full match.

Employer and employee money together are governed by a different, higher cap. Under Internal Revenue Code section 415(c), the combined total of everything that flows into your account in 2026, your deferrals, the match, and profit-sharing, is $72,000, up from $70,000 in 2025. Catch-up contributions sit on top of even that figure for those eligible. Most people never approach the 415(c) limit; it mainly matters for high earners with large employer contributions.

If your plan offers both a traditional (pre-tax) and a Roth (after-tax) 401(k), they draw from the same single employee limit. The $24,500 cap for 2026 is the combined total across both, not $24,500 each. You can split your contributions between them however you like, but the sum cannot exceed the one limit. The choice between traditional and Roth changes when you are taxed, pre-tax now versus tax-free withdrawals later, but not how much you are allowed to put in.

This is different from a Roth IRA, which is a separate account type with its own, much lower contribution limit and income rules. If you want to understand that side, see our Roth IRA contribution limits guide, and our what is a 401(k) guide for how the account itself works.

Putting in more than the annual limit creates what the IRS calls an excess deferral, and it needs to be fixed. The standard correction is to ask your plan administrator to return the excess amount plus the earnings it generated, generally by April 15 of the year after the contribution. Handle it in time and you are simply taxed on the returned amount in the right year; miss the deadline and the excess can end up being taxed twice, once when contributed and again when withdrawn.

Over-contributing most commonly happens to people who change jobs mid-year, because each employer's payroll system only tracks contributions to its own plan and has no view of what you put in elsewhere. If you switched employers, add up your deferrals across both plans against the single annual limit. If you find an excess, contact your plan administrator promptly and consider speaking with a tax professional, since the correction has tax filing implications. Walnut is not a tax advisor and this is not tax advice.

All amounts above are for the 2026 tax year and come from the IRS cost-of-living adjustments. The IRS revises these limits annually, so before you set or change your contributions, confirm the current figures directly with the IRS. Walnut is informational and is not a financial or tax advisor; this is not tax advice.

For 2026 you can defer up to $24,500 of your own pay into a 401(k), or $32,500 if you are 50 or older, or $35,750 if you are 60 to 63 thanks to the SECURE 2.0 catch-up. Your employer's match is on top of that, and the combined employer-plus-employee total is capped at $72,000. Traditional and Roth 401(k) contributions share a single limit, and if you accidentally go over, the fix is to have the excess returned by the following April 15.

These numbers reset each year, so treat the figures here as the 2026 snapshot and verify the current amounts with the IRS before acting. Once your contributions are flowing, the next question is what they are invested in; you can read about an individual ETF, look at a single stock, or explore a theme you want exposure to. For tax questions specific to your situation, talk to a qualified tax professional.