In 2026, retirement savers get a meaningful boost. The standard 403(b) elective deferral limit increases to $24,500, allowing employees to set aside even more for their future. Total combined employee and employer contributions can reach up to $72,000. 

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Those age 50 or older can take advantage of an additional $8,000 catch-up contribution, bringing their total to $32,500. Even more notably, employees aged 60–63 may qualify for an enhanced “super catch-up” provision, offering an opportunity to accelerate retirement savings during critical pre-retirement years.

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Let’s break it down clearly.


What Is a 403(b) Plan?

A 403(b) plan is a tax-advantaged retirement savings account designed specifically for employees of public schools, certain nonprofit organizations, and some religious institutions. If you’re a teacher, healthcare worker, government employee, or work for a tax-exempt organization, this is likely your primary workplace retirement plan.

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In simple terms, a 403(b) works much like a 401(k), but it’s tailored for the public and nonprofit sector.

If you're wondering how these two plans truly compare in terms of contribution limits, employer matching, and long-term flexibility, you can read more at - 403(b) vs. 401(k) plans.

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How It Works:

A 403(b) allows you to contribute a portion of your salary directly into a retirement account before taxes (Traditional 403(b)) or after taxes (Roth 403(b)). The money is invested in options such as:

• Mutual funds

• Annuities

• Target-date funds

Over time, your contributions grow through compounding, meaning you earn returns not just on what you invest but also on your accumulated earnings.

403b Contribution Limits

Here’s a clear breakdown of the 403b contribution limits for 2026 and what they mean for your retirement strategy:

• Standard Employee Contribution Limit: $24,500
  
  In 2026, employees can contribute up to $24,500 in elective salary deferrals to their 403(b) plan. This is the base limit for individuals under age 50 and applies to both Traditional and Roth 403(b) contributions combined.
  
  
• Age 50+ Catch-Up Contribution: Additional $8,000
  
  If you are age 50 or older, you can contribute an extra $8,000 beyond the standard limit. That brings your max contribution to the 403(b) total to $32,500 for the year, allowing pre-retirees to accelerate savings.
  
  

If you’re unsure how much you should be contributing based on your salary and retirement timeline, use our 403(b) Retirement calculator to see how today’s contributions can impact your future income.

• Ages 60–63 “Super Catch-Up” Provision
  
  Employees between the ages of 60 and 63 may qualify for an enhanced catch-up contribution under updated retirement legislation. This provision allows eligible participants to contribute even more during peak earning years, making it a powerful planning window before retirement.
  
  
• Total Combined Contribution Limit: $72,000
  
  The overall annual limit, which includes both employee and employer contributions, increases to $72,000 in 2026. This cap applies to the combined total of salary deferrals, employer matching contributions, and any additional employer-funded amounts.
  
  Some state and public employees may also have access to a 401(a) plan alongside their 403(b). Understanding how employer contributions differ between these accounts is critical. Here’s a clear comparison of 401(a) vs. 403(b) plans to help you see how they work together.
  
  
• 15-Year Service Catch-Up (If Eligible)
  
  Certain long-term employees (15+ years with the same qualifying employer) may qualify for an additional $3,000 per year, subject to a lifetime maximum of $15,000. Coordination with your HR department or advisor is essential before utilizing this provision.
  
  
• Traditional vs. Roth Contributions
  The 403(b) contribution limits apply collectively to both Traditional (pre-tax) and Roth (after-tax) contributions. You cannot exceed the annual limit by contributing separately to each.
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Total Combined Limit (Employee + Employer)

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There is a total annual cap on combined contributions
If your employer contributes to your 403(b), the IRS sets a maximum limit on the total amount that can be added to your account each year.

2025 Combined Contribution Limit: $69,000
The total of employee and employer contributions cannot exceed $69,000 for the year.

Age 50+ Combined Limit: $76,500
If you are eligible for the age 50 catch-up contribution, the total combined limit increases to $76,500.

What Counts Toward This Limit
This total includes:

• Your salary deferrals (Traditional and/or Roth contributions)
• Employer matching contributions
• Employer nonelective contributions
  
  

Why This Matters
Every dollar contributed to your 403(b) during the year counts toward this cap. Exceeding the limit can result in required corrections and potential tax implications, so it is important to monitor both your contributions and your employer’s contributions carefully.

Important Points to Note

• Roth Catch-Up Requirement

Starting January 1, 2026, an important change affects higher-income employees who are age 50 or older. If you earned $150,000 or more in FICA wages in 2025 from the employer sponsoring your 403(b) plan, any catch-up contributions you make in 2026 must be made to a Roth account. This means those contributions will be made with after-tax dollars instead of pre-tax dollars.

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In practical terms, you will pay taxes on that money now, but qualified withdrawals in retirement will be tax-free. While this may slightly increase your taxable income today, it can create valuable tax diversification in retirement. It is also important to understand that the $150,000 threshold is based only on wages from that specific employer, not your total household income.

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• 100% of Salary Rule

Another key rule to understand is that your total contributions cannot exceed 100 percent of your includible compensation for the year. Simply put, you cannot contribute more than you earn.

For example, if your eligible compensation for the year is $45,000, your total 403(b) contributions cannot exceed that amount, even if IRS limits allow for a higher contribution. This rule ensures contributions remain aligned with your actual earnings and prevents excess funding.

• Plan Rules Matter

While the IRS sets maximum contribution limits, your employer’s 403(b) plan may have its own guidelines. 

Some plans may not offer Roth options, and others may not allow certain catch-up provisions. Before making decisions, it is always wise to review your plan details with your HR department or plan administrator so you fully understand what options are available to you.

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How do we help?

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At State Pension Advisors, we believe state employees deserve more than generic retirement advice. Your benefits system is complex, layered, and full of decisions that can permanently impact your income. We specialize exclusively in state retirement planning, helping you align your FERS pension, TSP, Social Security, and tax strategy into one clear, confident plan. 

If you seek a clear path towards retirement, this is not the time for uncertainty. 

Schedule a call with us today and get clarity on your numbers, your options, and your path forward.

Final Thoughts

Too many state employees treat 403(b) contribution limits as just another IRS update. That is a mistake. These limits are not just numbers on paper. They are real opportunities to strengthen your retirement income and create long-term financial stability.

If you are not intentionally working toward the full 403(b) contribution limits available to you, you may be leaving meaningful growth on the table. The maximum 403(b) amount is not reserved for high earners or financial experts. It is a strategic tool for anyone who wants more control over their retirement future.

Your pension alone may not define your lifestyle in retirement. How you use your 403(b), how consistently you contribute, and how early you plan will make the difference. Retirement confidence is built through clarity and action, not assumptions.

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FAQs

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What is the maximum 403(b) contribution for 2026?

For 2026, employees can contribute up to $24,500 to their 403(b) plan through salary deferrals. If you are age 50 or older, you are eligible to contribute an additional $8,000 catch-up amount, increasing your max contribution to the 403b total to $32,500 for the year.

Beyond your individual contribution, there is also an overall annual cap that includes both what you contribute and what your employer adds. In 2026, the total combined contribution limit can reach $72,000. This amount includes your Traditional or Roth salary deferrals, along with any employer matching or nonelective contributions made on your behalf.

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What is the contribution rate for 2026?

There is no fixed “rate” required for 403(b) contributions. Instead, you choose how much of your salary to contribute, either as a percentage or a flat dollar amount, up to the annual IRS limit of $24,500 in 2026.

Your ideal contribution rate depends on your income, retirement timeline, pension structure, and long-term income goals. Many employees increase their contribution percentage gradually each year to maximize growth.

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What is the tax-free contribution limit for 2026?

If you are contributing to a Roth 403(b), your contributions are made with after-tax dollars. The annual limit remains $24,500 (or $32,500 if eligible for catch-up), but qualified withdrawals in retirement are tax-free.

If you are contributing to a Traditional 403(b), contributions reduce your taxable income today, but withdrawals are taxed in retirement.

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What is the income limit for catch-up contributions in 2026?

There is no income limit for standard catch-up eligibility at age 50. However, beginning in 2026, if you earned $150,000 or more in FICA wages in 2025 from your employer, any catch-up contributions must be made to a Roth account instead of a Traditional account.

This rule applies based on wages from your specific employer, not total household income.

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