403(b) Maximum Contribution Limits — 2025 vs 2026
If you work in healthcare, education, or a nonprofit organization, you might already know that a 403(b) plan is one of the most powerful tools for building retirement savings. At Precision Billing, we understand that managing your finances is just as important as managing your practice. That’s why knowing your 403(b) contribution limits can help you maximize your savings while staying compliant with IRS rules.
Standard Employee Contribution Limits
For most participants under age 50, the standard 403(b) contribution limits are:
2024: $23,000
2025: $23,500
2026: $24,500
These limits apply to the total amount you can contribute through salary deferrals, combining both traditional pre-tax and Roth after-tax contributions. If you have both types of accounts, your combined contributions cannot exceed these annual limits.
Total Combined Employee + Employer Contribution Limits
Beyond your own contributions, employer contributions also count toward a total 403(b) limit:
2024: $69,000
2025: $70,000
2026: $72,000
Important: You cannot contribute more than your total annual salary. All contributions—employee deferrals, employer matching, and any additional employer contributions—count toward this overall limit.
Catch-Up Contributions
Standard Catch-Up (Age 50+)
Employees aged 50 and older are eligible for additional contributions:
2024: $7,500
2025: $7,500
2026: $8,000
This allows older workers to boost their retirement savings beyond the standard limit. For example, total contributions for someone 50+ can reach:
2024: $30,500 ($23,000 + $7,500)
2025: $31,000 ($23,500 + $7,500)
2026: $32,500 ($24,500 + $8,000)
Enhanced Catch-Up (Ages 60–63)
Thanks to the SECURE 2.0 Act, employees aged 60 to 63 can make even higher contributions starting in 2025:
2025: $11,250 (instead of $7,500)
2026: $11,250 (instead of $8,000)
This “super catch-up” allows total contributions of:
2025: $34,750 ($23,500 + $11,250)
2026: $35,750 ($24,500 + $11,250)
Note: Not all 403(b) plans offer the enhanced catch-up, so check with your plan administrator.
Special 15-Year Service Catch-Up
Unique to 403(b) plans is a 15-year service catch-up for long-tenured employees. Eligible employees who have worked 15+ years for the same nonprofit employer (school, hospital, etc.) can contribute up to $3,000 per year, capped at $15,000 lifetime, if prior contributions were relatively low ($75,000 or less).
Example:
Worked 15 years, total prior contributions: $50,000
Maximum allowed by 15-year rule: $75,000
Eligible special catch-up: $15,000 (over multiple years, max $3,000 per year)
You can use this catch-up alongside the age-based catch-up if eligible.
403(b) Contribution Tables
Employee Contribution Limits ($)
| Employee Category | 2024 | 2025 | 2026 |
|---|---|---|---|
| Basic Deferral (Under 50) | $23,000 | $23,500 | $24,500 |
| Standard Catch-Up (50–59 & 64+) | $7,500 | $7,500 | $8,000 |
| Enhanced Catch-Up (60–63) | N/A | $11,250 | $11,250 |
| 15-Year Service Catch-Up | $3,000/year | $3,000/year | $3,000/year |
Total Contribution Scenarios (Employees Only)
| Employee Category | 2024 | 2025 | 2026 |
|---|---|---|---|
| Under 50 | $23,000 | $23,500 | $24,500 |
| Age 50–59 | $30,500 | $31,000 | $32,500 |
| Age 60–63 (Enhanced) | N/A | $34,750 | $35,750 |
| Age 64+ | $30,500 | $31,000 | $32,500 |
| With 15-Year Service (Under 50) | $26,000 | $26,500 | $27,500 |
| With 15-Year Service (50–59) | $33,500 | $34,000 | $35,500 |
| With 15-Year Service (60–63) | N/A | $37,750 | $38,750 |
| With 15-Year Service (64+) | $33,500 | $34,000 | $35,500 |
Maximizing Your 403(b) Contributions
Start Early: Contribute from the beginning of the year to maximize growth.
Increase Gradually: Raise contributions whenever you get a raise.
Prioritize Employer Match: Always contribute enough to get the full match—it’s free money.
Leverage Catch-Up Provisions: Use age-based, enhanced, or 15-year catch-ups if eligible.
Consider Roth vs. Traditional: Roth grows tax-free, while traditional contributions reduce taxable income.
Comparing 403(b) and 401(k)
| Feature | 403(b) | 401(k) |
|---|---|---|
| Who it’s for | Public schools, hospitals, nonprofits | Most private-sector employers |
| Contribution Limits | Same IRS limits | Same IRS limits |
| Age 50+ Catch-Up | Yes | Yes |
| Enhanced Catch-Up (60–63) | Yes (if offered) | Yes (if offered) |
| 15-Year Service Catch-Up | Unique to 403(b) | Not available |
| Investment Options | Historically annuities, now mutual funds | Varies, often broader |
Withdrawals
After 59½: Taxable pre-tax contributions; Roth tax-free if 5-year rule met.
After Separation: May withdraw; under 59½ usually 10% penalty unless “Rule of 55” applies.
Hardship: Allowed for medical, educational, or disaster expenses; taxable and limited to contributions.
FAQs
Q: Can I contribute to both 403(b) and 401(k)?
A: Yes, but combined contributions cannot exceed annual limits.
Q: Do employer matches count?
A: They count toward total combined limits, not elective deferral limits.
Q: Can I split contributions between Roth and Traditional?
A: Yes, but total contributions must stay within limits.
Q: What if I over-contribute?
A: Excess contributions are taxed twice. Contact your plan administrator to correct before April 15.
At Precision Billing, we help healthcare professionals understand these retirement strategies so you can maximize your 403(b) contributions without mistakes. Start planning today to secure a comfortable retirement!