Four things about your 401(k) that are changing in 2026
In 2026, some of the rules governing your 401(k) plan will change: contribution limits are increasing, catch-up contributions for some will have to be made on a Roth basis, and compensation limits are going up. We’ve summarized these rule changes for you, so you can go into 2026 confident in your retirement plan offering.
Key takeaways:
- 401(k) employee deferral limits are increasing to $24,500 (from $23,500)
- The total contribution limit on 401(k) plans is rising to $72,000
- High earners will have to make their catch-up contributions on a Roth basis
- Compensation limits are increasing to $360,000
1. Participant contribution limits are going up
In 2026, individuals will be allowed to defer up to $24,500 towards their 401(k) or similar retirement savings plan (like a 403(b) or the government’s Thrift Savings Plan). This is an increase of $1,000 per year.
Catch-up contribution limits are also being raised. If you’re over 50, in 2026 you’ll be able to make $8,000 in catch-up contributions. That’s $500 more compared to 2025’s limit.
One thing that isn’t changing is the limit on higher catch-up contributions that kick in if you’re aged 60-63. Those contributions are remaining at $11,250.
Over on the IRA side of retirement planning (we know many of our readers have both a 401(k) and an IRA!), contribution limits are also increasing to $7,500 per year.
2. The total contribution limit is increasing
Establishing a retirement plan is a good way for organizations to boost retention, especially when employers offer a match on contributions or leverage a Safe Harbor plan to contribute a specific amount to their participants’ retirement accounts. These employer contributions are subject to a separate limit, and that’s going up in 2026 also. It will increase to $72,000.
This means that an employee who defers the maximum $24,500 can also benefit from an additional $47,500 in employer 401(k) contributions. If you’re an employer seeking to retain key personnel, consider increasing your match: your employees are more likely to remain comfortably under this increased limit in 2026.
3. High earners will have to make catch-up contributions on a Roth basis
We’ve covered this in detail before: starting in 2026, highly paid individuals aged 50 and above will have to make their catch-up contributions to a Roth account (i.e. they pay taxes on those contributions now). A highly paid individual is someone paid more than $150,000 in W-2 wages in the prior year.
ePlan Services can help you adopt a Roth option on your plan at no additional charge. This is important: you may be prevented from making any catch-up contributions on your plan until you adopt this option.
If you have a plan with us and do not currently offer a Roth option, you’ll be alerted when you sign in.
Click See Options to begin the Roth setup process.
4. Compensation limits will increase in 2026
They’re going up by $10,000, to $360,000. A compensation limit means that only income up to that point can be considered when calculating contributions. It has implications for compliance testing (such as non-discrimination testing) and compensation matching formulas.
If you’d like assistance determining the exact impact of this change on your 401(k) plan, contact your financial advisor. Don’t work with a financial advisor? We’ve been cultivating a network of the best in the USA and would be happy to send you options suited to your needs: reach out!
