IRS Announces 2026 Retirement Contribution Limits: 401(k) up to $24,500, IRA to $7,500
It’s that time of year again! Just as we’re settling into our financial groove, the IRS gives us a new set of numbers to plan for. And guess what? The news is pretty good for savers! The IRS has officially released Notice 2025-67, which details all the cost-of-living adjustments (COLAs) for retirement plan limitations for the 2026 tax year.
If you’re like me, you’re always looking for ways to maximize your retirement savings. These annual increases are a fantastic, relatively “painless” way to bump up your savings rate without feeling the pinch. Let’s break down exactly what’s changing, what’s staying the same, and how you can use this information to get ahead on your financial goals. 😊
Workplace Plans: 401(k), 403(b), 457, & TSP Limits 📈
This is the big one for most people. The amount you can personally contribute (your “elective deferral”) to your workplace retirement plan is getting a solid bump.
For 2026, the contribution limit for employees who participate in 401(k), 403(b), most 457 plans, and the federal government’s Thrift Savings Plan (TSP) is increased to $24,500 . That’s up from $23,500 in 2025.
- Main Contribution Limit: $24,500
- 2025 Limit (for comparison): $23,500
But what about catch-up contributions? The rules here are a bit more nuanced, especially with the SECURE 2.0 Act changes. Here’s the breakdown by age.
Catch-Up Contributions (Ages 50+)
If you’ll be age 50 or over at any point in 2026, you get to contribute even more. The standard catch-up contribution limit is increasing to $8,000 .
- This brings your total possible contribution to $32,500 ($24,500 base + $8,000 catch-up).
Special Catch-Up (Ages 60, 61, 62, or 63)
Thanks to the SECURE 2.0 Act, there’s a *special*, higher catch-up for those nearing retirement. If you are age 60, 61, 62, or 63 in 2026, your catch-up contribution limit is $11,250 . This limit remains unchanged from 2025.
- This brings your total possible contribution to $35,750 ($24,500 base + $11,250 special catch-up).
- Important: This special catch-up *replaces* the standard $8,000 catch-up. You don’t get to add them together!
Remember that new rule from the SECURE 2.0 Act? For 2026, if your wages in 2025 were over $145,000, your catch-up contributions (both the regular $8,000 and the special $11,250) *must* be made on a Roth (after-tax) basis. The IRS has confirmed this wage threshold is increasing to $150,000 for 2026 wages, which will apply to 2027 contributions .
Individual Retirement Accounts (IRA) Limits 🏦
Good news for IRA savers, too! Whether you have a Traditional IRA or a Roth IRA, the total amount you can contribute is increasing.
The 2026 IRA contribution limit is increasing to $7,500 , up from $7,000 in 2025.
The IRA catch-up contribution for those age 50 and over (which is now also indexed to inflation, thanks to SECURE 2.0) is increasing to $1,100 , up from $1,000.
- Main Contribution Limit: $7,500
- 50+ Catch-Up Limit: $1,100
- Total for Ages 50+: $8,600
2026 Income Limits for IRA & Roth Contributions 📊
This is where things get a little more complicated. Unlike your 401(k), your ability to *deduct* a Traditional IRA contribution or *contribute* to a Roth IRA can be limited by your income (Modified Adjusted Gross Income, or MAGI).
These income “phase-out” ranges have also increased for 2026, which is great news! It means more people will be eligible for these tax-advantaged accounts.
Traditional IRA Deduction Phase-Outs
This is for people who are covered by a workplace retirement plan (like a 401(k)). If you aren’t covered by a workplace plan, you can deduct your full contribution regardless of income.
| Filing Status | 2026 Phase-Out Range | 2025 Range (for comparison) |
|---|---|---|
| Single / Head of Household | $81,000 – $91,000 | $79,000 – $89,000 |
| Married Filing Jointly (MFJ) | $129,000 – $149,000 | $126,000 – $146,000 |
| Married Filing Separately (MFS) | $0 – $10,000 | $0 – $10,000 (no change) |
If you are not covered by a workplace plan, but your spouse is, the phase-out range for you (the non-covered spouse) is $242,000 to $252,000 for MFJ .
Roth IRA Contribution Phase-Outs
This is the income range that determines if you can contribute to a Roth IRA at all. If your MAGI is above this range, you can’t directly contribute (though a “Backdoor Roth” might still be an option!).
| Filing Status | 2026 Phase-Out Range | 2025 Range (for comparison) |
|---|---|---|
| Single / Head of Household | $153,000 – $168,000 | $150,000 – $165,000 |
| Married Filing Jointly (MFJ) | $242,000 – $252,000 | $236,000 – $246,000 |
| Married Filing Separately (MFS) | $0 – $10,000 | $0 – $10,000 (no change) |
Other Key Retirement Plan Updates 🧮
The IRS notice covers more than just 401(k)s and IRAs. Here are a few other key updates for 2026.
For small businesses with SIMPLE retirement accounts:
- The main contribution limit increases to $17,000 (from $16,500) .
- The 50+ catch-up limit increases to $4,000 (from $3,500) .
The “Big” Overall Limits 📝
Defined Contribution Limit (§415(c)): This is the *total* limit for all contributions to a defined contribution plan (like a 401(k)), including your deferrals, employer matches, and profit sharing. This limit increases to $72,000 (from $70,000) .
Annual Compensation Limit (§401(a)(17)): This is the maximum amount of your salary that can be considered for retirement plan calculations. This limit increases to $360,000 (from $350,000) .
Saver’s Credit (Retirement Savings Contributions Credit)
This is a fantastic, but often overlooked, tax credit designed to help low-to-moderate-income taxpayers save for retirement. The maximum income to be eligible for the credit has been increased for 2026:
- Married Filing Jointly: up to $80,500
- Head of Household: up to $60,375
- Singles / MFS: up to $40,250
Key Takeaways for Your 2026 Plan 📝
Whew, that’s a lot of numbers! So what should you do with this information? Here are the key action items:
- Boost Your 401(k): If you’re on track to max out your 401(k) this year, plan to increase your deferral percentage or amount for 2026 to hit the new $24,500 limit. Even an extra $1,000 can make a huge difference over time!
- Don’t Forget Your IRA: That $7,500 IRA limit is a powerful tool. If you’re eligible, contributing to a Roth IRA is a great way to build tax-free savings for retirement.
- Check Your Income Eligibility: Review the new income phase-out ranges. If you were previously phased out of a Roth IRA or IRA deduction, you might be eligible again in 2026!
- Know Your Catch-Up: If you’re 50 or older, make sure you know which catch-up applies to you. Especially if you’re in that 60-63 age bracket, don’t leave that extra $3,250 ($11,250 vs $8,000) on the table if you can afford it.
2026 Retirement Limits at a Glance
Frequently Asked Questions ❓
This is a lot of great news for savers. These increases are a powerful reminder of the importance of consistent, long-term saving. Time to check your contribution rates and get ready for 2026!
What are your thoughts on these new limits? Will this change your savings strategy for 2026? Let me know in the comments! 😊
