What You Need to Know About the New IRS 401(k) Max Limits

What You Need to Know About the New IRS 401(k) Max Limits

What You Need to Know About the New IRS 401(k) Max Limits
What You Need to Know About the New IRS 401(k) Max Limits

Higher Contribution Limits

Starting in 2025, you can now put up to $23,500 of your own money into your 401(k). That’s your personal maximum before considering any employer match.1

If your company contributes too, whether through a match or profit-sharing, the total amount that can go into your account for the year climbs to $70,000. It’s a generous cap that gives high-income savers more flexibility.1

And in 2026, both numbers rise again, with the employee limit increasing to $24,500 and the full combined limit reaching $72,000.2

Extra Savings for Those 50 and Up

If you’re 50 or older, you can keep taking advantage of “catch-up” contributions. For 2025, that amount stays at $7,500, bringing your personal max to $31,000.3

There’s also a special bonus for those aged 60–63, a higher catch-up tier that lets you add up to $11,250. That means someone in that age range could contribute as much as $34,750 of their own money in 2025. 3

Why These Increases Matter

These higher limits may give you more room to save, especially helpful if you’re trying to make up for lost time or want to take advantage of tax-advantaged growth while you’re at your peak earning years. 4

It’s also a reminder to review your plan:

  • Are you contributing enough to hit the new max?
  • Does your employer match change as you increase your contribution?
  • And have you considered whether pre-tax or Roth contributions make more sense for your situation?

The Bottom Line

The IRS is increasing 401(k) limits again, which means you have more opportunity to build long-term wealth. For 2025, think $23,500 for most savers, and potentially much more if you’re 50 or older.3 If your cash flow allows, bumping up your contribution could make a real difference in your future income.

References

  1. Internal Revenue Service. (2024). COLA increases for dollar limitations on benefits and contributions. https://www.irs.gov/retirement-plans/cola-increases-for-dollar-limitations-on-benefits-and-contributions
  2. Internal Revenue Service. (2025, November 13). 401(k) limit increases to $24,500 for 2026, IRA limit increases to $7,500. https://www.irs.gov/newsroom/401k-limit-increases-to-24500-for-2026-ira-limit-increases-to-7500 IRS
  3. Internal Revenue Service. (2024). Notice 2024-80: 2025 amounts relating to retirement plans and IRAs, as adjusted for changes in cost-of-living. https://www.irs.gov/pub/irs-drop/n-24-80.pdf
  4. Intuit TurboTax. (2024). Tax-advantaged accounts: How they can boost your savings. https://turbotax.intuit.com/tax-tips/investments-and-taxes/tax-advantaged-accounts-how-they-can-boost-your-savings/c4fKPc6Tf

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