Retirement Contribution Impact & Limits
Building long-term financial well-being starts with informed choices
Saving for Retirement
Saving for retirement is one of the most powerful steps you can take toward long-term financial well-being. Even small decisions, like increasing your retirement contribution rate by 1% each year, could make a significant difference over time.
The information below provides a general overview of retirement contribution limits and how contributions can impact future savings. Including practical considerations to help you think about setting a contribution rate that meets your long-term financial goals.
For personalized, confidential financial guidance, please contact EY Financial Planning Services, available at no additional cost* as part of your retirement plan. Wespath cannot provide investment advice.
Types of Retirement Plan Contributions
Retirement plans generally allow three types of personal contributions. Each has different tax implications, which can affect how your savings grow over time.
Before-Tax Retirement Contributions
- Contributions are made before income taxes are withheld from your pay. Also called pre-tax contributions.
- This reduces your taxable income, potentially resulting in tax savings.
- You pay taxes on your contributions and investment earnings when you take distributions in retirement.
Reminder: Choosing a contribution type depends on your personal financial circumstances. For individualized advice, please contact EY Financial Planning Services.
NOTE: Clergy may be able to claim the housing allowance exclusion, which is an exclusion from income, not a deduction. This means that when reporting gross income for federal income tax purposes, clergy can exclude a portion of their income designated by their church or salary paying unit as a “housing allowance” under Section 107 of the Internal Revenue Code (IRC).
2026 Retirement Contribution Limits
Each year, the IRS sets limits on how much individuals can contribute to employer-sponsored retirement plans. For 2026, the maximum personal contribution limits are as follows:
| wdt_ID | wdt_created_by | wdt_created_at | wdt_last_edited_by | wdt_last_edited_at | Age in 2026 | Annual Personal Contribution Limit | Includes |
|---|---|---|---|---|---|---|---|
| 1 | scribe | 02/20/2026 05:17 AM | scribe | 04/01/2026 06:42 PM | Under age 50 | $24,500 | - |
| 2 | scribe | 02/20/2026 05:17 AM | scribe | 04/01/2026 06:43 PM | Age 50–59 | $32,500 | $8,000 catch-up contribution* |
| 3 | scribe | 02/20/2026 05:17 AM | scribe | 04/01/2026 06:43 PM | Age 60–63 | $35,750 | $11,250 “super catch-up” contribution* |
| 4 | scribe | 02/20/2026 05:17 AM | scribe | 04/01/2026 06:43 PM | *Age 64+ | $32,500 | $8,000 catch-up contribution* |
*Under the SECURE 2.0 Act of 2022, effective 2026 age-based catch-up contributions for employees with wages (subject to Federal Insurance Contributions Act or “FICA” taxes) greater than $150,000 in 2025 (as indexed) must be made on a Roth basis, rather than before-tax basis.
NOTE: Clergy whose entire income (net earnings from self-employment) is subject to Self-Employment Contributions Act (SECA) taxes (instead of FICA) will not be impacted by this provision.
Why Your Retirement Contribution Rate Matters
Your retirement contribution rate (expressed as a percentage of your plan compensation) determines how quickly your retirement savings can grow. While higher contributions potentially build a larger account balance over time, even modest contributions over many years can make a meaningful difference due to the power of compounding.
Potential Impact of Contributing More
Increasing contributions, even by 1% annually, can add up significantly over a career.
Potential Impact of Contributing Less
Lower personal contributions mean you may need to rely more heavily on employer contributions.
Practical Tips for Setting or Increasing Your Retirement Contribution Rate
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1. Start with What Feels Manageable
You don’t have to begin at the maximum limit. Starting small and growing over time is an effective approach.
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2. Increase Gradually
Consider raising your contribution rate by 1% each year, or when you receive a salary increase. Small steps may feel easier and still lead to meaningful long-term impact.
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3. Revisit Annually
Life and finances change. Reviewing your contribution rate at least once a year can help keep your savings aligned with your goals.
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4. Avoid “Pausing” Contributions
Breaks from saving reduce the time your money has to grow. If you must pause savings, try to restart as soon as you can.
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5. Use Educational and Planning Resources
Wespath offers tools, articles, and webinars to support your financial understanding.
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6. For Personal Guidance, Contact EY
If you would like help deciding on a contribution level or understanding how different choices may affect your situation, connect with EY Financial Planning Services, which can offer personalized, professional advice. Wespath cannot provide individualized financial recommendations.
Saver’s Credit
Some individuals may qualify for a federal tax credit when they contribute to a retirement plan. Eligibility is based on income and filing status. 2026 income limits:
| wdt_ID | wdt_created_by | wdt_created_at | wdt_last_edited_by | wdt_last_edited_at | Filing Status | 2026 Income Limit for Tax Credit |
|---|---|---|---|---|---|---|
| 1 | scribe | 02/20/2026 05:17 AM | scribe | 04/01/2026 06:47 PM | Married filing jointly | $80,500 |
| 2 | scribe | 02/20/2026 05:17 AM | scribe | 04/01/2026 06:47 PM | Head of household | $60,375 |
| 3 | scribe | 02/20/2026 05:17 AM | scribe | 04/01/2026 06:47 PM | Married filing separately | $40,250 |
| 4 | scribe | 02/20/2026 05:17 AM | scribe | 04/01/2026 06:48 PM | Single | $40,250 |
Health Savings Account (HSA) Limits
If you are enrolled in a qualifying high-deductible health plan, you can contribute to a Health Savings Account (HSA). This is an additional way to save for future medical expenses before and during retirement.
2026 HSA contribution limits:
- $4,400 for individuals
- $8,750 for families
- An additional $1,000 catch-up contribution if you are age 55 or older
Note: HSAs and retirement plan contributions are separate accounts.
This page provides general educational information only. It is not intended as financial, tax, or investment advice. For personalized guidance, such as help determining an appropriate contribution percentage, please contact EY Financial Planning Services.
* Financial planning services are available to all active participants and surviving spouses with an account balance in Wespath-administered plans, as well as to terminated and retired participants with an account balance of at least $10,000. Costs for these services are included in Wespath’s operating expenses that are paid for by the funds.