TaxWren2026 401(k) contribution limits
| 2026 | 2025 | |
|---|---|---|
| Employee contributions (under 50) | $24,500 | $23,500 |
| Catch-up, age 50 or older | $8,000 | $7,500 |
| Catch-up, ages 60 to 63 | $11,250 | $11,250 |
| Total at 50+ / at 60-63 | $32,500 / $35,750 | $31,000 / $34,750 |
The same limit covers 403(b) plans, the federal Thrift Savings Plan and governmental 457(b) plans. Source: IRS Notice 2025-67 (2026 retirement plan and IRA limits).
How much tax a 401(k) saves
Income tax saved in 2026 by contributing 10% of salary to a traditional 401(k), single filer:
| Salary | Contribution | Tax saved, Texas | Tax saved, California | Real cost, Texas |
|---|---|---|---|---|
| $40,000 | $4,000 | $480 | $640 | $3,520 (88%) |
| $60,000 | $6,000 | $720 | $1,080 | $5,280 (88%) |
| $80,000 | $8,000 | $1,760 | $2,420 | $6,240 (78%) |
| $100,000 | $10,000 | $2,200 | $3,130 | $7,800 (78%) |
| $150,000 | $15,000 | $3,600 | $4,995 | $11,400 (76%) |
The saving is your marginal income tax rate on each dollar contributed. It is larger in states with an income tax: the 6% example above saves $990 in Texas and $1,350 in California. Social Security and Medicare are still due on the contributions.
Traditional vs. Roth 401(k)
- Traditional: contributions are made before tax and reduce your taxable income now; withdrawals of contributions and earnings are taxed as income.
- Roth: contributions are made after tax, so your paycheck shrinks by the full amount; withdrawals of contributions and earnings are tax-free if qualified (the account is at least five years old and you are 59½ or older, disabled or deceased).
- Roth contributions are elective deferrals too, so both types share the same $24,500 limit. Employer contributions count toward a separate, higher overall limit.
Already have money in a traditional IRA? The Roth conversion calculator shows what moving it to a Roth costs. For your whole paycheck, see the take-home pay calculator.
Sources: IRS Notice 2025-67 (2026 retirement plan and IRA limits); IRS Topic 424, 401(k) plans; IRS, Roth comparison chart; IRS, 401(k) and profit-sharing plan contribution limits. The projection uses your own return and raise assumptions and holds the limits at 2026 amounts; it is an illustration, not a forecast.