The 2026 401(k) limits are here. Here’s the most you can save next year.

Millions of workers saving for retirement now know how much money they can stash next year in 401(k)s and other tax-advantaged retirement accounts.

The annual announcement from the Internal Revenue Service may have extra significance in 2026, as 401(k) contributions become a valuable tool many can use to ensure they’re making the most of new tax breaks in President Donald Trump’s new tax law.

Workers can save up to $24,500 next year in their 401(k)s, as well as other tax-deferred accounts, including 403(b), 457 plans and the federal government’s Thrift Savings Plan, the IRS said Thursday. That’s up from a $23,500 contribution maximum this year. 

Individual savers are getting extra space to tuck away more. People putting money into traditional IRAs can contribute up to $7,500 — an increase from the $7,000 maximum this year.

The IRS announces contribution limits on retirement accounts every year. The numbers are indexed to rise with inflation, as are tax brackets and the income levels that trigger certain capital-gains tax rates. 

This year, the 401(k) announcement coincides with the rollout of a range of new tax breaks.

New tax breaks from the One Big Beautiful Bill Act for tip income, overtime, and state and local tax bills all contain income thresholds. Once a household is above a certain income level, the deduction’s value either decreases or disappears entirely.

Also read: Homeowners: The SALT deduction is going up to $40,000. Here’s how to get the most out of it.

That’s where 401(k) contributions come in. Retirement savers decrease their taxable income when they contribute to these plans. The tax hit comes when the 401(k) disperses money back to the individuals.

Extra 401(k) contributions can keep people beneath the income cutoffs of the One Big Beautiful Bill Act, some financial advisers say.

The 401(k) contribution limits are a tax-planning tool for some. But they are a far-off goal for many.

Approximately 14% of people contributed the full statutory amount in 2024, according to Vanguard research released earlier this year. 

This year’s IRS update has some good news for older workers trying to put even more money into these accounts.

For the first time in two years, workers 50 to 59 are getting the chance to save even more.

The 2026 catch-up provision climbs to $8,000 from $7,500. The same contribution amount applies to workers 64 and older.

In all, these workers will be able to save a maximum $32,500 at once, combining the catch-up provisions with the 401(k) contribution limits. Few workers are able to put aside the full amount. Last year, 16% of savers eligible to make extra catch-up provisions gave the full amount, according to Vanguard research.

Meanwhile, workers between 60 and 63 can continue to save up to $11,250 extra. These “super catch-up” rules permitted the $11,250 beginning this year, so long as the plan allowed the extra contributions.

The latest IRS announcements also contained information on the income thresholds surrounding deductions for IRA contributions and claiming the saver’s credit.

The IRS update also specified the 2026 rules for Roth IRA contributions. Above certain income levels, individuals can no longer contribute to these valuable after-tax retirement accounts.

For 2026, the income phaseout for individuals making Roth IRA contributions begins at $153,000 and vanishes after $168,000. The phaseout on contributions for married couples starts at $242,000 and contributions are no longer allowed after $252,000.