"Workers have a choice of tax-advantaged retirement plans they can contribute to, but for many people, a 401(k) is the default option. Some workers are actually auto-enrolled in their 401(k), but even for those who aren't, signing up for benefits is simple and fast. Employers often match contributions to 401(k) plans, which is a huge benefit, and 401(k) accounts also come with generous tax breaks, as you can contribute with pre-tax dollars."
"Should you increase 401(k) contributions as the limit goes up? In 2025, the maximum contribution to a 401(k) for most workers was $23,500. The limit is increasing to $24,500 in 2026, according to the IRS. Workers 50 and over had a catch-up contribution limit of $7,500 in 2025, and that limit is also going up to $8,000. For employees ages 60 to 64, the catch-up contribution limit for both 2025 and 2026 is higher than the standard $8,000, totaling $11,250."
Many workers default to 401(k) plans, with some auto-enrolled and others able to sign up quickly. Employer matching of contributions provides substantial immediate value, and 401(k) accounts offer pre-tax contribution benefits. The 401(k) contribution limit for most workers rises from $23,500 in 2025 to $24,500 in 2026. Catch-up contribution limits increase as well, moving from $7,500 to $8,000 for those 50 and over, with ages 60–64 able to contribute up to $11,250 under catch-up rules. Maximizing contributions is not universally appropriate; prioritizing employer match and individual financial needs is crucial.
Read at 24/7 Wall St.
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