The 401(k) is the workplace retirement account most Americans have access to, and it comes with a feature no other account offers: an employer match. Before optimizing anything else, the rule is simple. If your employer matches contributions, contribute at least enough to get the full match. It is the only guaranteed, instant return on your money you will ever be offered, often 50 or 100 percent, and skipping it is leaving salary on the table.
The 2026 numbers
For 2026, you can defer $24,500 of your own salary into a 401(k). That is the employee limit, and it is separate from anything your employer adds.
Catch-up contributions raise the ceiling as you age. At 50 and older, you can add $8,000, for a total of $32,500. And thanks to a SECURE 2.0 provision, savers aged 60 to 63 get a larger super catch-up of $11,250, for a total of $35,750 in those four years specifically.
There is also an overall cap on everything that goes into the account in a year, including your contributions, the employer match, and any after-tax contributions. For 2026 that total limit is $72,000 (catch-up amounts sit on top of it). Most people never approach it, but high earners with generous plans can.
Traditional or Roth
Many plans let you choose the flavor of your contributions. Traditional 401(k) contributions are pre-tax: they lower your taxable income today, and you pay tax on withdrawals in retirement. Roth 401(k) contributions are after-tax: no deduction now, but qualified withdrawals later are tax-free. The choice mirrors the RRSP-versus-TFSA logic. If your tax rate is high now and likely lower later, traditional tends to win. If you expect higher rates in retirement, or you are early in your career, Roth is attractive.
One 2026 wrinkle to know: under SECURE 2.0, if you earned more than $145,000 from your employer in the prior year, your catch-up contributions must be made as Roth. It is a rule that mostly affects higher earners, but it is worth checking before you assume your catch-up is pre-tax.
The priority order
A widely used sequence: contribute to the 401(k) up to the full employer match, then move to an HSA if you have one and a Roth or traditional IRA, then come back and fill the rest of the 401(k). The match comes first because nothing else pays an immediate guaranteed return. The rest is a matter of which account gives you the best long-term tax treatment for your situation.
To see how much 401(k) room you have left for 2026, including catch-up amounts for your age, run the 2026 contribution room calculator.
Sources: IRS — 401(k) contribution limits and IRS — cost-of-living adjustments for retirement items.