While retirement planning can feel overwhelming, your 401(k) plan serves as a powerful tool when it comes to securing your financial future. By understanding how contributions, catch-up rules, employer matches and regular investment reviews work together, you can help set yourself up for long-term success.

Consistent Contributions

The foundation of a successful 401(k) strategy is making regular contributions over a long period of time. These contributions are typically made pre-tax—lowering your taxable income and allowing your money to grow tax-deferred until retirement. More and more 401(k) plans offer Roth contributions, which means you pay the taxes now but can withdraw tax-free if you are 59½ or better and your first contribution was at least five years earlier. For 2026, the IRS allows annual contributions up to $24,500 into a 401(k).

If your employer offers a 401(k) match, try to contribute at least enough to earn this ‘free’ money. If contributing up to the match feels like your limit right now, start there. Then, each time you receive a pay raise, increase your contribution by 1%. This simple habit helps your savings grow in step with your income. You may even be able to automate the increase through your 401(k) provider’s site or app.

Catch-Up Contributions

If you’re age 50 or better, you can make additional “catch-up” contributions beyond the standard limit of $24,500. The chart below illustrates the 2026 contribution limits by age.

*IRS Inflation-Adjusted Annually

A new rule, beginning in 2026, requires all catch-up contributions to be Roth contributions if your compensation was $150,000 or greater in 2025. This means that any catch-up contribution will no longer reduce your taxable income in the year you contribute; however, qualified Roth withdrawals are tax-free. This provision is designed to help those nearing retirement boost and accelerate their savings during peak earning years.

Employer Matches

As previously mentioned, employer matching contributions are essentially free money. Companies often offer a match based on a percentage of your salary—like 50% of your contributions up to 6% of your pay. For example, if you earn $70,000 and contribute 6% ($4,200), your employer might add another $2,100. That’s a 50% return before your investments even start growing.

Failing to contribute enough to get the full match is like leaving part of your paycheck behind. Review your plan’s matching formula and make sure you’re contributing at least the minimum required to maximize this benefit.

Helpful Tip: If you’re on track to max out your 401(k) contributions this year, spread them evenly across all pay periods. This ensures you receive your employer match with every paycheck. Maxing out too early could mean missing out on those final matching contributions.

Investment Reviews

Most 401(k) plans offer a mix of investment options, and your allocations should reflect your personal risk tolerance, time horizon and retirement goals. It is recommended that you:

• Check your investment mix annually, especially as you get closer to retirement and consider whether it is appropriate to shift toward more conservative investments.
• Consider rebalancing your allocations periodically to ensure your portfolio doesn’t drift from your intended investment mix.
• Avoid emotional decisions, especially during times of market volatility, and stick to your long-term plan unless your goals or circumstances change.

While retirement planning is often decades in the making, every dollar you contribute today is a dollar that can potentially grow for decades. Start saving early and consistently and take the time to review your overall strategy on a regular basis to confirm you’re still making adequate progress toward your goals.

The 401(k) is one of the most popular retirement savings tools in America, but it’s not your only option. There are other accounts and strategies that can complement your 401(k) and help you reach both short- and long-term goals. With a bit of research—and guidance from a financial professional—you can feel confident you’re making the best choices for your future.

For more than 100 years, Busey Wealth Management’s experienced advisors have been helping clients achieve their financial goals. To learn more about our holistic services or find an advisor near you, visit busey.com/wealth-management.

This is not intended to provide legal, tax or accounting advice. Any statement contained in this communication concerning U.S. tax matters is not intended or written to be used, and cannot be used, for the purpose of avoiding penalties imposed on the relevant taxpayer. Clients should obtain their own independent tax advice based on their particular circumstances.

This material is provided for educational purposes only and should not be construed as investment advice or an offer or solicitation to buy or sell securities.

This presentation is for general information purposes only. It does not take into account the particular investment objectives, restrictions, tax and financial situation or other needs of any specific client.