What traders have to know

As extra older People close to retirement, many are keen to spice up 401(okay) financial savings to fight the rising price of well being care and different day-to-day bills. And for 2026, there are key 401(okay) modifications that traders have to know, monetary specialists say.

This yr, “small 401(okay) particulars matter greater than ever,” stated licensed monetary planner Joon Um with Safe Tax and Accounting in Hayward, California.

For 2026, you’ll be able to defer as much as $24,500 into your 401(okay) plan, up from $23,500 in 2025. The full plan restrict, which incorporates employer matches, revenue sharing and different contributions, is $72,000.

There’s additionally the next 401(okay) catch-up contribution restrict. In 2026, traders age 50 and older can save an extra $8,000 per yr, up from $7,500 in 2025. The “tremendous catch-up” restrict for savers age 60 to 63 stays at $11,250 for 2026.

Particular person retirement account contribution limits additionally rose for 2026. The brand new cap is $7,500, up from $7,000 in 2025. Buyers age 50 and older could make a $1,100 catch-up contribution, up from $1,000 the earlier yr.

The most recent 401(okay) modifications come as many older People do not feel prepared for his or her golden years.

Multiple-third of U.S. adults have delayed or plan to delay retirement, in accordance with a New York Life survey that polled roughly 2,300 adults in September. The highest two causes weren’t sufficient financial savings and inflation.

So-called “outlined contribution plans,” which embody 401(okay)s, are the first retirement financial savings software for a lot of non-public sector U.S. employees. These plans coated greater than 100,000 million contributors in 2023, in accordance with a September report from the Division of Labor.

“Greater [401(k)] deferral limits are useful, however provided that contributions are literally adjusted,” Um stated.

In 2024, some 45% of contributors boosted 401(okay) deferrals — on their very own or as a part of their plan’s computerized will increase — in accordance with Vanguard’s 2025 How America Saves report, which is predicated on greater than 1,400 plans and almost 5 million contributors.

Nonetheless, solely 14% of contributors maxed out their 401(okay)s in 2024, and the common mixed financial savings fee, together with employer deposits, was an estimated 12%, in accordance with the identical report. 

“We’re encouraging shoppers to revisit this early within the yr,” Um stated.

If you happen to’re age 50 and older, your 401(okay) catch-up contributions could be conventional pretax or after-tax Roth, relying on what your plan permits. 

However beginning in 2026, sure increased earners should make Roth catch-up contributions, based mostly on a Safe 2.0 Act of 2022 change.   

Neil Krishnaswamy, a CFP and president of Krishna Wealth Planning in McKinney, Texas, has talked with shoppers concerning the 401(okay) change.

In 2026, your 401(okay) catch-up contributions typically have to be Roth in case you earned greater than $150,000 from the identical employer in 2025. Yow will discover out if this is applicable to you by reviewing the gross revenue in your ultimate 2025 paystub, Krishnaswamy stated.

However the “Roth mandate” would not apply this yr in case you began a brand new job on Jan. 1, 2026, “even in case you earned $1 million at your earlier agency,” he stated. You are additionally exempt in case you exceeded the $150,000 threshold through a number of employers.