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Personal FinanceExplainerPast Article

A Contribution Limit Is Not a Return

The IRS publishes how much you may put in. It does not publish how much the account will earn.

By Claire Ng, Retirement Columnist

Washington1 min read

Lincoln Memorial, Washington
Lincoln Memorial, WashingtonPhoto by Zetong Li on Unsplash

Retirement accounts are containers with rules. In a given year the IRS may raise the amount an employee can defer into a 401(k), or the amount that can go into an IRA. Those figures are limits on contributions. They are not yields.

The IRS sets those limits in an annual notice. For 2026, the employee deferral limit is $24,500, up from $23,500. The IRA limit is $7,500, and the ordinary catch-up is $8,000 for workers 50 and older. A higher catch-up, $11,250, applies at ages 60 to 63. None of it is an investment result.

What the account earns after the contribution is a separate question, and it is not answered by the notice. Adding an expected return to the limit is a forecast, not a rule.

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