The IRS has raised the amount you can stash in a 401(k) next year, and the new number is big enough that ignoring it could cost you real money.
For 2026, the employee contribution limit climbs to $24,500, up from $23,500 in 2025.
Catch-up contributions for workers 50 and older stay at $7,500, while a newer super catch-up of $11,250 is reserved for those aged 60 to 63.
That extra $1,000 may not sound like much, but it adds up fast.
If you're paid biweekly, maxing out means deferring roughly $942 per paycheck instead of about $904.
The gap widens further once employer matching enters the picture, since many companies match a percentage of what you put in.
The IRS ties these thresholds to inflation, so as the cost of living climbs, the ceiling on tax-advantaged retirement savings climbs with it.
It's one of the few places where higher prices actually work in your favor, at least on paper.
Here's the catch that trips up a lot of savers: your employer's match does not count toward the $24,500 personal limit.
Total contributions from you and your boss combined can reach $72,000 in 2026, up from $70,000.
That combined cap matters most for high earners whose companies are generous.
The smartest move is often to grab the full employer match first, because that's an immediate return you won't find anywhere else.
After that, bump your contribution by even 1% each raise and you'll barely feel it in your budget.
One more wrinkle worth knowing: high earners who made over $145,000 in the prior year must now route their catch-up contributions into a Roth account, meaning after-tax dollars.
That changes the math for a lot of people in their 50s who were counting on the upfront tax break.
For anyone juggling rent, groceries, and credit card bills, the idea of saving $24,500 can feel laughable.
But the limit is a ceiling, not a requirement.
Even an extra $50 a month compounds over decades into something you'll be glad you have.
Our take: the annual limit bump is easy to scroll past, yet it's one of the few freebies the tax code hands ordinary workers.
Check your payroll settings, confirm you're at least capturing the full match, and nudge the number up when you get a raise.
Final Thoughts
Small, boring, automatic moves beat a perfect plan you never start.