New 401(k) Limits for 2026: 4 Expert Tips To Boost Your Retirement Savings
Written by
Gabrielle Olya
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Molly Sullivan
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Good news for retirement savers: The IRS has announced that the 401(k) contribution limit will rise to $24,500 in 2026, up from $23,500 in 2025. This increase gives you more room to save for retirement and reduce your tax bill — but only if you take advantage of it.
Here are four expert strategies to make the most of the new limit.
Max Out Your 401(k) To Fight Inflation
As living costs climb, you’ll need more savings to maintain your lifestyle in retirement.
“[The increase in the 401(k) contribution limit] gives savers an opportunity to combat inflation by adding more dollars to their retirement plans,” said Evan Potash, wealth management advisor at TIAA. “The more you save now, the more you have later.”
Boost Contributions To Cut Taxes
Contributing more to a traditional 401(k) lowers your taxable income for the year.
“Those who add more to pretax accounts will have a tax credit right away,” Potash said.
This means you can save for the future while reducing your current tax burden.
Consider Roth Contributions for Future Tax Savings
If you expect to be in a higher tax bracket later, making contributions to a Roth 401(k) may be a smart choice.
“Roth contributions are ideal for those who do not get a large tax credit today if they were to add to a pretax account,” Potash said. “If they expect to be in a higher tax bracket in the future, they should consider adding some to a Roth within their 401(k).”
Potash noted that Roth 401(k) plans allow much higher contributions than Roth IRAs, which cap at $7,500 in 2026. And starting in 2027, high-income workers ages 50-plus — those earning $145,000 or more — will be required to make catch-up contributions as Roth contributions under new IRS rules.
“On the surface, this could be discouraging since the saver is not getting the tax credit today,” Potash said. “However, this is an opportunity to diversify from a tax perspective. Roth contributions in an employer plan are exempt from required minimum distributions, and all withdrawals will be tax-free in retirement.”
Increase Savings Gradually — but Start Now
If you can’t hit the $24,500 limit right away, don’t worry — start by increasing your contribution from 2025.
“Wealth isn’t built overnight,” Potash said. “It takes time and a savings commitment.”
He recommended bumping up your contribution whenever you get a raise, and, at a minimum, to contribute enough to get your company match — it’s free money.
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