What Is a 401(k)?
A 401(k) is a retirement savings plan offered by many employers.
Employees can contribute part of their paycheck to the account, and the money can generally be invested in options such as mutual funds, target-date funds and other investments selected by the plan.
Depending on the plan, contributions may be made on a traditional pre-tax basis, a Roth after-tax basis or both.
Why Consider a 401(k)?
Explore 401(k) Options
Compare Common 401(k) Options
| Feature | Traditional 401(k) | Roth 401(k) | 401(k) Rollover |
| Contributions | Generally pre-tax | After-tax | Transfer of existing savings |
| Tax on Withdrawals | Generally taxable | Qualified withdrawals tax-free | Depends on destination |
| Market Exposure | May be available | May be available | No new employer match |
| Investment Choices | Plan-specific | Plan-specific | Depends on new account |
| Common Use | Current tax savings | Future tax-free income | Consolidating old accounts |
401(k) Contribution Limits
401(k) contribution limits are set by the IRS and can change from year to year.
Important factors include:
- Employee contribution limit
- Catch-up contributions
- Employer contributions
- Total annual contribution limit
- Age
- Plan rules
- Compensation
2026 401(k) Contribution Limits
Review the current IRS contribution limits for 401(k) plans, including employee deferrals, catch-up contributions and the overall employee-plus-employer limit.
| 2026 401(k) Limit | Amount |
|---|---|
| Employee Elective Deferral | $24,500 |
| Age 50+ Catch-Up Contribution | $8,000 |
| Higher Catch-Up — Ages 60–63 | $11,250 |
| Employee + Employer Total Limit | $72,000 |
| Maximum With Standard Catch-Up | $80,000 |
| Maximum With Ages 60–63 Catch-Up | $83,250 |
| Annual Compensation Limit | $360,000 |
Data year:
2026
Update frequency:
Annually
Source:
Internal Revenue Service (IRS)
—
View official IRS 401(k) limits
Contribution limits can change annually. Individual plan rules, compensation and eligibility may affect how much a participant can contribute.
2026 401(k) Plan Thresholds & Special Limits
Review additional 2026 IRS thresholds that can affect 401(k) plan administration, highly compensated employees and certain plan contribution rules.
| 2026 401(k) Threshold | Amount |
|---|---|
| Highly Compensated Employee Threshold | $160,000 |
| Key Employee Threshold | $235,000 |
| Annual Compensation Limit | $360,000 |
| Defined Contribution Plan Limit | $72,000 |
| 401(k) Elective Deferral Limit | $24,500 |
| Age 50+ Catch-Up Contribution | $8,000 |
| Higher Catch-Up — Ages 60–63 | $11,250 |
Data year:
2026
Update frequency:
Annually
Source:
Internal Revenue Service (IRS)
—
View official IRS limits
These thresholds are general federal limits. Individual plan terms and nondiscrimination rules may affect how they apply to a specific participant or employer.
2026 401(k) vs. SIMPLE 401(k) Contribution Limits
Compare the 2026 contribution limits for a standard 401(k) plan and a SIMPLE 401(k), including regular employee deferrals and catch-up contributions.
| 2026 Contribution Limit | Standard 401(k) | SIMPLE 401(k) |
|---|---|---|
| Employee Elective Deferral | $24,500 | $17,000 |
| Age 50+ Catch-Up | $8,000 | $4,000 |
| Higher Catch-Up — Ages 60–63 | $11,250 | $5,250 |
| Maximum Employee Deferral With Standard Catch-Up | $32,500 | $21,000 |
| Maximum Employee Deferral Ages 60–63 | $35,750 | $22,250 |
Data year:
2026
Update frequency:
Annually
Source:
Internal Revenue Service (IRS)
—
View official IRS contribution limits
SIMPLE 401(k) plans have separate contribution limits from traditional 401(k) plans. Individual plan rules may impose lower limits.
2026 401(k) Roth Catch-Up Rules
Beginning in 2026, some higher-income workers must make their 401(k) catch-up contributions as Roth contributions. The table below summarizes the key thresholds and catch-up limits.
| 2026 Roth Catch-Up Rule | Amount | What It Means |
|---|---|---|
| Prior-Year Wage Threshold | $150,000 | Above this amount, 2026 catch-up contributions generally must be Roth. |
| Standard Age 50+ Catch-Up | $8,000 | Applies to most eligible participants age 50 or older. |
| Higher Catch-Up — Ages 60–63 | $11,250 | Higher SECURE 2.0 catch-up limit for participants ages 60 through 63. |
| Regular 401(k) Deferral Limit | $24,500 | Regular employee elective-deferral limit before catch-up contributions. |
| Maximum With Standard Catch-Up | $32,500 | $24,500 regular deferral plus $8,000 catch-up. |
| Maximum Ages 60–63 | $35,750 | $24,500 regular deferral plus $11,250 higher catch-up. |
Data year:
2026
Update frequency:
Annually
Source:
Internal Revenue Service (IRS)
—
View official IRS catch-up rules
The Roth catch-up requirement is based on prior-year FICA wages from the employer sponsoring the plan. Plan design and individual circumstances can affect how the rule applies.
What Can Affect Your 401(k) Growth?
Who May Consider a 401(k)?
Benefits and Things to Consider
401(k) vs. Other Retirement Accounts
Common 401(k) Questions
Related Retirement Option
Ready to Explore Your 401(k) Options?
Learn about contributions, employer matching, investments and rollover choices to make better use of your workplace retirement plan.