The IRS lets you defer $24,500 into a 401(k) in 2026, and another $7,500 into an IRA. On an $85,000 salary, the 401(k) cap alone is 28.8% of gross pay. Almost nobody hits it, and you don’t have to. You need a percentage you can defend, and the limits tell you where the ceiling is.
Dollars are the wrong unit
Your paycheck doesn’t arrive in annual limits. It arrives in percentages: 6% to the match, 10% to the 401(k), whatever the payroll form asks for. So translate.
