401(k) Basics for 2026: Limits, Catch-Ups, the Match, and Vesting

The 401(k) is the retirement account most Americans meet first, and the one with the most moving parts: contribution limits, catch-ups, employer matches, and rules about what you actually own. This is Part 1 of our Retirement Accounts Decoded series, with the 2026 numbers from the IRS.

2026 contribution limits

The IRS raised the 2026 limits in November 2025. Employees can defer up to $24,500 into a 401(k), up from $23,500 in 2025. Workers 50 and older can add a catch-up, and a higher catch-up applies to ages 60 through 63.

The $11,250 higher catch-up for ages 60 to 63 is unchanged from 2025, per the IRS. The totals include your own deferrals only. A separate overall limit of $72,000 applies to the sum of employee and employer contributions in 2026 ($80,000 with the standard catch-up, or up to $83,250 for ages 60 to 63). The total shown for 60 to 63 is simple addition of the base limit and the higher catch-up. Your plan can set limits lower than these maximums.

Traditional or Roth

Many plans let employees designate some or all of their deferrals as Roth contributions. Pre-tax contributions are excluded from taxable income now and taxed when withdrawn. Roth contributions are made after tax, with qualified withdrawals later generally tax-free. Our guide to Roth vs. traditional covers how to think about the choice.

The employer match

Matching contributions are common but usually optional. The Department of Labor says there's generally no requirement that an employer contribute to a 401(k), with exceptions such as SIMPLE and safe harbor 401(k) plans. A typical formula matches a percentage of what you put in, up to a percentage of your pay.

Vesting: what's actually yours

Your own deferrals are always 100% yours. Per the IRS, employees are always fully vested in their own contributions. Employer contributions can vest over time under the plan's schedule. The IRS vesting page describes the two common structures: a cliff schedule, where you're 0% vested for the first two years and 100% at year three, and a graded schedule, where you vest 20% after two years and 20 more percentage points each year until 100% at year six.

If you leave an employer before you're fully vested, you may forfeit part of the match. That's a point to check before a job change. Our guide on what to do with an old 401(k) covers the options after you leave.

A new rule for higher earners' catch-ups

Under a SECURE 2.0 provision, if your wages from the plan sponsor in the prior year exceeded a threshold, your catch-up contributions must be made as Roth contributions. The IRS says the threshold is $150,000 of prior-year wages for 2026, so 2025 wages decide. The final regulations technically apply to taxable years beginning after December 31, 2026, with plans allowed to use a reasonable, good-faith interpretation in the meantime, so how your plan implements this in 2026 may vary. Ask your plan administrator if you're near the threshold.

Common questions

What is the 401(k) contribution limit for 2026?

The employee deferral limit is $24,500. Workers 50 and older can contribute an additional $8,000 catch-up, for $32,500. Ages 60 to 63 can contribute a higher $11,250 catch-up, for $35,750.

Is an employer 401(k) match required?

Usually not. The Department of Labor says there is generally no requirement that an employer contribute to a 401(k), though safe harbor and SIMPLE 401(k) plans do require employer contributions. Many employers offer a match as a benefit.

What does vesting mean in a 401(k)?

Vesting is the share of employer contributions that belongs to you. Your own contributions are always 100% vested. Employer contributions may vest on a schedule, such as a three-year cliff or a graded schedule reaching 100% at six years.

Do I have to make Roth catch-up contributions?

Only if you're a higher earner. The IRS says that if your prior-year wages from the plan sponsor exceeded $150,000 (for 2026), catch-up contributions must be Roth in plans that offer catch-ups with Roth features. Final regulations phase in the requirement, so check how your plan handles it.