Contribution Limits and Catch-Up Rules
The fifth episode of our 401(k) season takes on the question every saver meets at the payroll screen: how much are you actually allowed to put in? John, Maria, Melissa and Steve separate the three ceilings that govern a 401(k). The personal elective deferral limit — $24,500 for 2026, up from $23,500 in 2025 — and why it follows you, not your job, across employers; the combined annual additions limit of $72,000 for 2026 covering your deferrals, employer money and after-tax contributions together, with catch-ups stacked on top; and the $360,000 cap on pay an employer may count. The catch-up contribution at 50 explained in full — $8,000 for 2026, available for the whole year in which you turn 50 — plus spillover versus separate catch-up elections. The SECURE 2.0 enhanced catch-up for ages 60 through 63 — $11,250 instead of the standard catch-up — and the Roth catch-up requirement taking full effect in 2026 for workers whose prior-year wages from the plan's employer exceeded $150,000. Two Money Math calculations, the fifteen-year value of the standard catch-up and the four-year enhanced window; the front-loading and true-up match trap; excess deferrals and the April 15 correction deadline; a clearly labelled invented case study of three coworkers, Dana, Marcus and Priya, at a fictional Ohio manufacturer; the practical playbook, seven traps, and a six-question audit to run on your own plan. Education only — no recommendations, no predictions.
Sources referenced (public, dated): Internal Revenue Service — Notice 2025-67 (2026 retirement plan limits, announced November 13, 2025), Notice 2024-80 (2025 limits) and 401(k) contribution limit guidance on irs.gov; the SECURE Act of 2019 and SECURE 2.0 Act of 2022, including the age 60–63 enhanced catch-up and the Roth catch-up provision; U.S. Department of Labor — consumer publications on workplace retirement plans and summary plan descriptions. Limits are stated as the federal figures for 2025 and 2026; each plan may set its own lower limits, percentage caps and definitions of compensation, and listeners should confirm their personal ceiling, catch-up mechanics and match true-up in their plan's summary plan description. The case study and the worked examples are invented and illustrative; the arithmetic examples are teaching calculations using a stated hypothetical growth assumption, not forecasts.
Audio format: MP3, 128 kbps CBR, 44.1 kHz, mono, -16 LUFS.
This episode is for financial education only and is not investment advice. Narration is AI-generated.
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