401(k) and IRA Contribution Limits for 2026

The 2026 limits at a glance

The IRA catch-up is new in one respect: the SECURE 2.0 Act gave it its first-ever inflation adjustment, lifting it from the flat $1,000 it had been stuck at for years to $1,100.

401(k): traditional vs. Roth

Your $24,500 of employee deferrals can go into a traditional (pre-tax) 401(k), a Roth 401(k), or a mix — the limit covers the combined total:

• Traditional 401(k): contributions reduce your taxable income now; you pay tax on withdrawals in retirement. Best if you expect to be in a lower bracket later.
• Roth 401(k): contributions are after-tax; qualified withdrawals in retirement are tax-free. Best if you expect rates to rise or your income to grow.

Employer matching contributions do not count against your $24,500 — they count against the $77,000 total limit. Always contribute at least enough to capture the full employer match; it is an instant 50–100% return.

Worked example: $90,000 salary, 10% contribution to a traditional 401(k). You defer $9,000. Your federal taxable income drops from $90,000 to $81,000, saving roughly $9,000 × 22% = $1,980 of federal income tax this year (you are in the 22% marginal bracket). The $9,000 grows tax-deferred until retirement.

Worked example: maximizing at 50+. A 55-year-old earning $200,000 contributes the full $24,500 plus the $8,000 catch-up = $32,500. If the employer adds a $10,000 match, the total $42,500 is still well under the $77,000 cap.

IRA: the account anyone with earned income can open

You do not need an employer plan to use an IRA. Anyone with US earned income (wages or self-employment) can contribute $7,500 for 2026 across traditional and Roth IRAs combined:

• Traditional IRA: contributions may be deductible, depending on your income and whether you (or your spouse) are covered by a workplace retirement plan. Deductibility phases out at higher incomes.
• Roth IRA: no deduction now, but tax-free growth and withdrawals. Eligibility phases out at higher incomes.

The deadline for 2026 IRA contributions is April 15, 2027 — you get extra months after year-end, unlike 401(k) contributions, which must come out of 2026 paychecks.

Worked example: newcomer couple, one income of $120,000. The working spouse maxes the 401(k) at $24,500. The non-working spouse can still contribute $7,500 to a spousal IRA (as long as the couple files jointly and has enough earned income). Household retirement savings: $24,500 + $7,500 = $32,000 of tax-advantaged space in year one.

HSA: the triple-tax-advantage account

If your health plan is a high-deductible plan (deductible of at least $1,700 self-only or $3,400 family in 2026), you can use a Health Savings Account: contributions are pre-tax, growth is tax-free, and withdrawals for medical expenses are tax-free. For 2026: $4,400 self-only, $8,750 family, plus $1,000 catch-up at 55+. Many financial planners rank the HSA above even the 401(k) for dollars beyond the employer match.

Roth vs. traditional: a decision framework for newcomers

The choice matters more than most people think, and newcomers have a special angle: your first partial year in the US is often your lowest-tax year ever here.

Choose Roth (pay tax now) when: your income is temporarily low (partial first year, grad school stipend, between jobs); you are young with decades of compounding ahead; you expect to be in a higher bracket later; or you want tax diversification alongside pre-tax savings.

Choose traditional (deduct now) when: you are in your peak earning years; you expect a lower income in retirement; you live in a high-tax state and want the state deduction too; or you need the deduction to stay under a credit phaseout threshold.

Worked example: the partial-year Roth window. You arrive in September 2026 and earn $30,000 by year-end. After the $16,100 standard deduction, taxable income is $13,900 — entirely in the 10% and 12% brackets. Every dollar you put in a Roth 401(k) or Roth IRA costs you only 10–12 cents of tax today, and grows tax-free forever. The same dollar contributed in a future $150,000 year would cost 22–24 cents. Front-loading Roth in year one is one of the highest-value moves a newcomer can make.

Many savers split the difference: traditional 401(k) up to the employer match, then Roth IRA, then back to traditional. There is no rule against holding both types.

What happens to these accounts if you leave the US

Retirement accounts don't evaporate when you emigrate, but they get awkward:

• 401(k)/IRA: the accounts stay open and keep growing tax-deferred, but most US brokerages restrict or close accounts for nonresident aliens. Withdrawals as a nonresident are generally subject to 30% withholding (treaty may reduce it), and Roth qualified-withdrawal rules still apply.
• Early withdrawal penalty: taking money before age 59½ generally triggers a 10% penalty on top of tax, with limited exceptions. Don't raid retirement accounts to fund a move.
• Treaty treatment varies. The US–Canada treaty, for example, generally respects the tax-deferred status of each country's retirement accounts and allows a rollover-like election. Other treaties differ — check before you move money across borders.

If there is any chance you'll leave within a few years, favor Roth contributions while you're here: tax-free withdrawals later are far simpler to manage from abroad than pre-tax accounts with withholding paperwork.