The IRS raised the 401(k) contribution limit to $24,500 for 2026, giving workers another $1,000 in tax-deferred savings room — though only a fraction of employees take full advantage of the cap.

The agency announced the increase Thursday , up from $23,500 in 2025. The change applies to 401(k)s, 403(b)s, most 457 plans and the federal Thrift Savings Plan.

Workers 50 and older can save even more , according to the new IRS guidance, which raises the catch-up contribution limit to $8,000 for 2026 — up from $7,500 in 2025.

That means older savers can deposit up to $32,500 in their 401(k)s next year.

Employees aged 60 to 63 get an even bigger break.

They can contribute an extra $11,250 on top of the $24,500 base limit, for a total of $35,750.

That figure, which is unchanged from this y

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