IRS Announces 2026 Retirement Contribution Limits

The Internal Revenue Service (IRS) has released its updated, inflation-adjusted contribution limits for retirement plans for 2026. While the increases are more modest than in recent years, they still provide a valuable opportunity to boost your retirement savings.

Understanding these new limits is a crucial step in your financial planning. Whether you're saving for retirement through an employer-sponsored plan like a 401(k) or using an Individual Retirement Arrangement (IRA), these changes can impact how much you're able to set aside for the future. Let’s break down what’s changing and how you can take advantage of it.

Key Retirement Plan Limit Changes for 2026

The IRS has increased the limits for most retirement plans, allowing you to save more. Here are the most significant updates from Notice 2025-67:

Increased Catch-Up Contributions

For those closer to retirement age, catch-up contributions offer a great way to accelerate savings. For 2026, these limits have also seen an increase:

• 401(k), 403(b), and 457 Plans: The catch-up contribution for those age 50 or older will increase from $7,500 to $8,000.
• IRA Contributions: The catch-up for those age 50 or older will rise from $1,000 to $1,100.
• SIMPLE Plans: The catch-up limit for those 50 and older will increase from $3,500 to $4,000.

It's important to note that catch-up contributions for those aged 60-63 in 401(k) and SIMPLE plans will remain the same at $11,250 and $5,250, respectively.

Starting in 2026, the SECURE 2.0 Act introduces a new rule: catch-up contributions for higher-income taxpayers (generally those earning over $150,000 in the prior year) must be made as post-tax Roth contributions. However, final regulations allow plans until the end of 2026 to implement this change, so some may continue to permit pre-tax catch-ups for the year.

Updated Income Limits for IRA Contributions

Your ability to contribute to or deduct contributions from an IRA often depends on your modified adjusted gross income (MAGI). For 2026, the income phaseout ranges for both traditional and Roth IRAs are increasing, which means more people may be eligible to contribute.

Traditional IRA Deductibility

If you or your spouse participate in an employer-sponsored retirement plan, your ability to deduct traditional IRA contributions is subject to MAGI phaseout ranges.

• Married Filing Jointly:
• • If the contributing spouse participates in a workplace plan, the phaseout range is $129,000–$149,000 (up from $126,000–$146,000).
  • If the contributing spouse does not participate but their partner does, the phaseout range is $242,000–$252,000 (up from $236,000–$246,000).
• Single and Head of Household: For those participating in a workplace plan, the phaseout range is $81,000–$91,000 (up from $79,000–$89,000).

If your income falls within these ranges, you can take a partial deduction. If it exceeds the range, you cannot deduct your contribution, but you can still make a nondeductible contribution.

Roth IRA Contributions

Your eligibility to contribute to a Roth IRA is also determined by your MAGI, regardless of your participation in a workplace plan.

• Married Filing Jointly: The phaseout range will increase to $242,000–$252,000 (up from $236,000–$246,000).
• Single and Head of Household: The phaseout range will increase to $153,000–$168,000 (up from $150,000–$165,000).

Put Your Retirement Plan in Motion

These updated 2026 limits provide a clear opportunity to enhance your retirement strategy. Maximizing your contributions, even with small increases, can have a significant long-term impact on your nest egg thanks to the power of compounding.

Reviewing your current savings plan is the first step toward making the most of these changes. At SD Mayer & Associates, we specialize in creating financial strategies that align with your unique goals. We can help you navigate these updates and adjust your plan to ensure you're on the best path toward a secure financial future.