Overview
- The 2026 employee limit rises to $24,500 for 401(k)s, with a standard catch-up of $8,000 and a higher $11,250 catch-up for ages 60–63; the IRA limit increases to $7,500 with a $1,100 catch-up.
- Roth IRAs take after-tax contributions, with earnings generally tax-free once the account is at least five years old and the owner is 59½, subject to eligibility rules and income phase-outs.
- Only 36% of Roth IRA contributors maxed out in the latest IRS data year cited (2022), with many savers falling short despite higher limits now in effect.
- Traditional-to-Roth conversions trigger immediate taxable income, and Jean Chatzky advises covering the bill from non-IRA funds; she notes potential benefits for high earners and estate planning depending on future tax expectations.
- Contribution timing remains a key choice, with some investors frontloading the full Roth amount early in the year while others use automated monthly transfers or gradual increases to reach the cap.