401(k) vs. IRA: 2026 Contribution Limits and How to Choose
The IRS raised retirement limits for 2026. Here are the new numbers, the catch-up rules for savers 50 and older, and a simple order for where to put your money.
2026 limits at a glance
- 401(k), 403(b), most 457 plans and TSP: $24,500 (up from $23,500).
- Catch-up at 50+: $8,000. Ages 60 to 63: $11,250 instead.
- IRA (traditional and Roth combined): $7,500, plus $1,100 catch-up at 50+.
- Roth IRA income phase-out: $153,000–$168,000 single, $242,000–$252,000 married filing jointly.
The 2026 numbers
| Limit | 2025 | 2026 |
|---|---|---|
| 401(k) employee deferral | $23,500 | $24,500 |
| 401(k) catch-up, age 50+ | $7,500 | $8,000 |
| 401(k) catch-up, ages 60–63 | $11,250 | $11,250 |
| Total employee + employer | $70,000 | $72,000 |
| IRA contribution | $7,000 | $7,500 |
| IRA catch-up, age 50+ | $1,000 | $1,100 |
| Roth IRA phase-out, single | $150k–$165k | $153k–$168k |
| Roth IRA phase-out, married joint | $236k–$246k | $242k–$252k |
So a 52-year-old can defer up to $32,500 into a 401(k) in 2026, and someone aged 60 to 63 up to $35,750.
New for 2026: Roth catch-up for higher earners
Under the SECURE 2.0 Act, if your FICA wages from that employer were above $150,000 in 2025, any catch-up contributions you make in 2026 must go in as Roth (after-tax) contributions. Your regular $24,500 can still be pre-tax. Check with your plan administrator, because the plan must offer a Roth option for you to make catch-up contributions at all.
401(k) vs. IRA: the main differences
| 401(k) | IRA | |
|---|---|---|
| Who opens it | Your employer | You, at any broker |
| 2026 limit (under 50) | $24,500 | $7,500 |
| Employer match | Often | No |
| Investment choices | Plan menu | Almost anything |
| Income limits | None to contribute | Roth: yes. Traditional deduction: sometimes |
Traditional or Roth?
Traditional contributions lower your taxable income now, and you pay tax when you withdraw in retirement. Roth contributions are taxed now, and qualified withdrawals later are tax-free. A common rule of thumb: if you expect a higher tax rate in retirement than today, Roth tends to win. If you are in your peak earning years and expect a lower rate later, traditional tends to win. Many people split contributions to hedge.
A simple order of operations
- Get the full employer match. If your employer matches 50% of the first 6% of salary, contribute at least 6%. A match is an instant return you cannot get elsewhere.
- Fund an IRA if you want lower fees or better investment choices than your plan offers.
- Go back to the 401(k) and raise your contribution toward the $24,500 limit.
- Use catch-up contributions once you turn 50.
Model your own numbers with our 401(k) retirement calculator, which applies the 2026 limits by age.
This article is general education, not personalized financial advice. Read our editorial policy and disclaimer.
