Key 401k Changes Coming in 2026: What You Need to Know

As we look ahead to 2026, several important changes are coming to your company’s 401k plan. These changes, ranging from higher contribution limits to new Roth contribution requirements for high earners, may affect how much you are able to contribute.  Here are the key changes you should know.

Higher Contribution Limits

Each year the IRS makes an inflation adjustment to the 401k maximum contribution limits. In 2026 the new employee deferral limit increases to $24,500 for those under age 50. Those aged 50 and older are eligible for an additional ‘catch-up’ contribution of $8,000 for a total contribution of $32,500.  Note that these limits are not percentage limitations.  You can calculate the percentage contribution by dividing the maximum contribution limit by your expected salary.  For example, if you are 55 and expect to make $200,000 in 2026 then you can calculate your maximum contribution as $32,500 divided by $200,000 which is 16.25%.

Enhanced Catch-up for Ages 60-63

For those ages 60-63 there is now an enhanced catch-up of $11,250 for 2026. This means that those age 60-63 will have an annual contribution limit of $24,500 plus $11,250 enhanced catch-up for a $35,750 total contribution limit.

Mandatory Roth Catch-up for High Earners

Beginning in 2026, certain high-earning employees must make catch up contributions on a Roth (after-tax) basis. This new limit applies if your prior year (i.e. 2025) wages exceed the $145,000 limit. Your 2026 pre-tax 401k contributions will be limited to $24,500.  Catch-up contributions of either $8,000 or $11,250 can only be made on a Roth (after-tax) basis.  Note that this rule will result in higher taxable income for high-earning employees. Most employers will keep track of these limits for you, but you may want to confirm with your employer.  

What it means for your retirement

Overall, these changes are positive since the higher contribution limits allow employees to save more for retirement. Of course, they also further complicate the 401k rules, keeping the accountants fully employed.  If you have questions or would like to discuss your situation, please give us a call.