A Roth 401(k) is a good option for workers who have access to this retirement plan through their employer and expect to be in a higher tax bracket when they retire. As an added bonus, contribution limits for 2026 have increased.
The maximum amount you can contribute to your 401(k) plan in 2026 has increased to $24,500, up from $23,500 for 2025 (if you're younger than age 50), per the IRS. This is an extra $1,000 over 2025. If you're age 50 or older, the standard catch-up contribution limit rises to $8,000 in 2026 (up from $7,500 in 2025). That's a total of $32,500 in 2026, up from $31,000 last year.
Plus, under SECURE 2.0 rules, if you're age 60–63, you qualify for a higher "super catch-up" limit (in addition to the standard contribution limit) of $11,250, for a total of $35,750. As the year ends, keep in mind that contributions must generally be made by the end of the calendar year to count for that tax year.
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The Roth 401(k) first became available in 2006, and many companies now offer this option to workers. The Roth 401(k), as the name implies, combines features of the tax-friendly Roth IRA and the traditional 401(k), enabling you to make after-tax contributions to a 401(k).
2026 Roth 401(k) contribution limits
In 2026, you can save up to $24,500 in your Roth 401(k). That's a $1,000 bump up from $23,500 in 2024. If you're 50 and older, the catch-up contribution limit increases to $8,000, up from $7,500 in 2025. Add that to the $24,500, and your total tops out at $32,500.
Additionally, thanks to the SECURE 2.0 Act, you may be getting an extra boost this year. If you're age 60 to 63, you'll also get a higher catch-up contribution limit. So, instead of the $7,500, you may be able to set aside up to $11,250 in extra contributions. That number is unchanged from 2025.
If you and your employer both contribute to your Roth 401(k), the total contributions to the account max out at $72,000 in 2026 (up from $70,000 in 2025). Keep in mind that the $72,000 limit is the combined total contributed by both parties and includes cost-of-living adjustments, not just employer contributions.
If you're age 50 or older, the total rises to $80,000 in 2026, up from $77,500 in 2025, including both the standard contribution and the catch-up amount.
A Roth 401(k) vs. a Roth IRA and a traditional 401(k)
As with a Roth IRA, you make after-tax contributions to a Roth 401(k). This won't lower your tax bill now, but it will provide you with tax-free income in retirement.
You can make withdrawals from a Roth 401(k) tax-free, and without incurring a 10% early-withdrawal penalty, once you've turned age 59-1/2 and have had the account open for at least five years.
If you retire after holding a Roth 401(k) for only two years, for example, the money must sit for three more years to be fully tax-free, even if you own an older Roth 401(k) account from a previous employer that meets the five-year test.
And as with a traditional 401(k), there are no income limitations with the Roth 401(k), making it an attractive option for high earners whose salaries might disqualify them from contributing to a Roth IRA.
You can also sock away thousands of dollars more each year with a Roth 401(k) or a traditional 401(k) than you can with an IRA alone.
If you're under the age of 50, the annual contribution limit for a Roth IRA is $7,500 for 2026, up from $7,000 in 2025. If you are 50 or older, the limit includes an additional $1,100 catch-up contribution, bringing the total to $8,600. These numbers reflect changes from previous years.
You must take required minimum distributions (RMDs) from a traditional 401(k) and a Roth 401(k) once you reach age 73. However, you can avoid RMDs from a Roth 401(k) by rolling over the money into a Roth IRA, which doesn't require minimum distributions.
Can I contribute to both a 401(k) and a Roth 401(k)?
The simple answer is yes — you can contribute to both a 401(k) and a Roth 401(k) at the same time and in the same year. Keep in mind that the total amount you can contribute to both accounts combined cannot exceed the annual limits.
In 2026, the annual contribution limit is $24,500 if you're under 50, plus a catch-up contribution of $8,000 for anyone age 50 or older. If you're 60, 61, 62, or 63, you'll get a higher 'super catch-up contribution' of $11,250 (unchanged from 2025). These annual contribution limits apply to all your employer-sponsored plans, including both traditional and Roth 401(k) accounts.
A fringe benefit of splitting contributions between the two accounts is the option to cut your taxable income in retirement and reduce risks. That way, you can enjoy tax-free retirement income on some of your money while paying taxes on some. You'll also have the freedom to change where contributions go based on your tax bracket.
How much should you save in a Roth 401(k)?
Many employers match employees' 401(k) contributions up to a certain percentage of salary. Note that any employer contributions to a Roth 401(k) will be made pretax and will grow tax-deferred alongside your own Roth contributions. When you withdraw money, you will owe income tax on the employer match.
Experts recommend that workers save at least 15% of their income for retirement, including the employer match. For example, if your employer contributes, say, 2%, then you would need to save an additional 13%.
If you are currently saving below the recommended 15% annually, increase your contribution every year until you reach that goal. For instance, if you are contributing 5% this year, increase it to 7% next year and so on until you reach 15%.
Is a Roth 401(k) right for you?
Roth 401(k) plans can be beneficial to workers who don't expect their tax bracket to decrease during their retirement. This may include younger employees who anticipate their income increases as they age. If a worker’s earnings increase dramatically and their tax bracket is higher than it will be in retirement, then it could make sense to switch to pretax deferrals in a regular 401(k).
Note: If you invest in both a Roth 401(k) and a traditional 401(k), the total amount of money you can contribute to both plans can't exceed the annual maximum limit for your age. If you exceed this limit, the IRS may hit you with a 6% excess contribution penalty on the amount over the limit.
Roth 401(k) retirement savings tips
Advice for maximizing your Roth 401(k) account:
- In 2026, max out your contributions. For each year that you're able, aim to hit the $24,500.
- If you're already over the age of 50 or you turn 50 in 2026, add another $8,000 to that limit annually while you continue to work.
- If your employer offers to match your contributions up to a certain amount, be sure to invest at least that much in your Roth 401(k) each month. It's free money, after all.
Why you might want a Roth 401(k)
Roth (401(k)s are not as popular as traditional 401(k)s. Part of the reason is that many people like to delay paying taxes. Contributions to traditional 401(k)s are made pre-tax, meaning you won’t pay taxes on your money until you begin making withdrawals in retirement.
By comparison, you make after-tax contributions to a Roth 401(k), which means your withdrawals (including gains) in retirement will generally be tax-free. You get tax-free growth on your investments, tax-free withdrawals in retirement, and higher contribution limits compared to a Roth IRA.
Another big plus is that there are no income limits for contributions. By adding a Roth 401(k) to your retirement savings plan, you get the kind of flexibility you need to make the most of your money in retirement.
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