To build retirement savings while you’re still employed, first review your workplace-plan contribution, capture any employer match your plan offers, and check whether catch-up contributions or an IRA fit your situation. If you also have eligible self-employment income, a separate plan option may be available. For U.S. workers, the 2026 limits below are federal limits; your plan may impose additional rules.
1. Raise your workplace-plan contribution if your budget allows
Check your current payroll election and consider increasing it. For tax year 2026, the employee elective-deferral limit is $24,500 for most 401(k), 403(b), governmental 457 plans and the Thrift Savings Plan, according to the IRS. SIMPLE plans have a separate $17,000 limit. These are federal maximums, not a required savings target: an employer plan may set a lower limit, and some highly compensated employees may face restrictions.
How much should you contribute to your 401(k)? There is no single amount that suits every household. Start with what your budget can sustain, check your plan’s limit and rules, and make a deliberate election through your employer’s plan process. The IRS’s 401(k) plan overview explains the general structure, but your plan documents govern its specific terms.
2. Find and capture your plan’s full employer match
If your employer offers matching contributions, look up the formula and how much you need to defer to receive the full match available to you. There is no standard formula: the IRS’s vesting guidance illustrates that plan terms can include contribution limits and vesting schedules.
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Check your summary plan description or ask the plan administrator about:
- the matching formula and the contribution level needed to receive the maximum match;
- whether the employer contribution is subject to a vesting schedule; and
- how the plan handles contributions throughout the year.
These details determine what “the full match” means in your plan; do not assume another employer’s formula applies to yours.
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3. Check whether you can make catch-up contributions
For 2026, eligible participants age 50 or older may be able to contribute an additional $8,000 beyond the basic limit in most non-SIMPLE workplace plans, if their plan permits it. Participants who turn 60, 61, 62 or 63 during the year may have a higher catch-up limit of $11,250. The IRS announced these limits in 2025 for tax year 2026; see its 2026 limit announcement.
SIMPLE plans have different catch-up limits for 2026: generally $4,000, or $5,250 for the higher age band. Check the IRS’s contribution guidance and confirm your plan type, age eligibility and whether the plan allows catch-ups before changing your election.
4. Consider an IRA, and check the tax rules before choosing one
The 2026 IRA contribution limit is $7,500, with an additional $1,100 catch-up contribution for people age 50 or older, according to the IRS. Having a workplace plan does not by itself answer whether a traditional IRA contribution is deductible.
For 2026, the IRS lists traditional IRA deduction phase-out starting thresholds of $81,000 for single or head-of-household filers and $129,000 for joint filers in the relevant workplace-plan coverage circumstances. These are the points where the phase-out begins, not universal income cutoffs for contributing. See the IRS’s 2026 tax-inflation adjustment table and confirm which filing and coverage rules apply to you.
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Before choosing a traditional or Roth IRA, separately check the current IRS eligibility and tax rules for that account type. The contribution limit alone does not establish whether a contribution is deductible or whether you qualify for a particular tax treatment.
5. If you have eligible self-employment income, review separate plan options
Workers with eligible self-employment income may have options beyond an employer plan, including a SEP arrangement. The IRS lists a $72,000 maximum SEP contribution for 2026, but compensation-based restrictions and other rules apply; it is not an automatic allowance for every side gig. Review the IRS’s SEP plan FAQs and consult qualified tax help if you need to determine how much you can contribute.
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How to make a change without overlooking plan rules
- Review your current election. Check your employer plan portal or contact the plan administrator to see how much you are contributing and what changes are available.
- Read the plan’s match and vesting terms. Use the summary plan description or ask the administrator to clarify the formula, limits and timing.
- Check age and plan-type rules. Confirm whether catch-up contributions are available to you and which limits apply.
- Review your other accounts. If considering an IRA or a self-employed plan, check the applicable federal rules and your tax circumstances before contributing.
- Revisit the election during the year. A raise or a change in household budget may make a new contribution level workable. The IRS recommends checking available opportunities, matching and catch-up eligibility in its midyear retirement check-up. Do not assume your plan automatically increases contributions; verify whether it offers that feature.
If you contribute to more than one applicable workplace plan, employee deferrals generally count toward an aggregate limit. Excess deferrals may need to be included in gross income; see the IRS’s excess-deferral guidance. Employer matches and other employer contributions also count toward the annual-additions limit, generally $72,000 or 100% of compensation for 2026, whichever is less, with separate catch-up treatment. The IRS explains the rules in its contribution guidance.
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