401(k) Basics: Contributions, Employer Match and the 2026 Limit

What a 401(k) is

A 401(k) is an employer-sponsored retirement account. With a traditional 401(k), your contributions are taken out before income tax, lowering your taxable income now; the money then grows tax-deferred until retirement.

The employer match is free money

Many employers match part of what you contribute — for example, 50% of your contributions up to 6% of your salary. Contributing at least enough to get the full match is one of the best returns available, because it is an immediate 50–100% gain on that money.

2026 contribution limit

The employee contribution limit for 2026 is $24,500 (higher catch-up limits apply at age 50+). The employer match is on top of your own contributions.

FAQ

How much should I contribute?

At minimum, enough to capture the full employer match. Beyond that, contributing more accelerates tax-deferred growth toward the annual limit.

What is the 2026 employee limit?

The 2026 employee contribution limit is $24,500, with additional catch-up contributions allowed for those 50 and older.

Related calculators

• 401(k) Calculator
• Retirement Savings Calculator