Don't Forget About This 401(k) Rule Change if You're Planning to Max Yours Out in 2026
Getting this wrong could be devastating at tax time.
Overview
A high 401(k) contribution rate is great, especially if you weren't able to save as much as you wanted to in the past. But there is such a thing as contributing too much to your 401(k), and it can trigger costly tax penalties that set you back.
Everyone has a contribution limit for the year, which depends on their age. This is $24,500 for adults under 50 in 2026, $32,500 for those 50 to 59, and 64 and older; it's $35,750 for those aged 60 to 63. But if you're just going by this alone, there's a chance you could still wind up in hot water with the IRS, depending on your annual income.
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Originally published at www.fool.com.
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