IRS announces increase in contribution limits for 401(k) plans and IRA accounts for 2026: here's how they'll change
The IRS announced Thursday, November 13 that contribution limits for 401(k) plans and IRAs will rise in 2026, allowing Americans to save more for retirement and better protect against inflation while sheltering taxable income.
Employees participating in 401(k), 403(b), governmental 457 plans, or the federal Thrift Savings Plan can contribute $24,500 in 2026, up from $23,500 in 2025, reflecting cost-of-living adjustments to account for inflation.
Workers aged 50 and older will see their catch-up contribution limit for most retirement accounts rise to $8,000 in 2026, an increase of $500 from 2025, whilst those aged 60-63 retain a higher catch-up limit of $11,250 under SECURE 2.0 rules.
Annual IRA contribution limits are increasing to $7,500 for 2026, up from $7,000 in 2025 and catch-up contributions for individuals aged 50 and older rise to $1,100, reflecting SECURE 2.0 cost-of-living adjustments to aid retirement savings.
Income ranges determining IRA deductions, Roth IRA eligibility, and the Saver’s Credit have also increased for 2026, allowing more taxpayers to take advantage of tax-advantaged retirement accounts based on filing status.
“The new 2026 retirement plan limits give people more room to save, which is especially helpful as retirement gets longer and more expensive,” Lisa Featherngill of Comerica Wealth Management said.
Married couples filing jointly with a spouse covered by a workplace plan have the IRA deduction phase-out range increased to $129,000-$149,000, up from $126,000-$146,000. Single filers covered by workplace plans have a range of $81,000-$91,000.
The Roth IRA phase-out range rises to $153,000-$168,000 for singles and heads of household, up from $150,000-$165,000. Married couples filing jointly can contribute if incomes are $242,000-$252,000, up from $236,000-$246,000.
SIMPLE retirement account limits increase to $17,000 for 2026, up from $16,500. Catch-up contributions for those 50 and older rise to $4,000, while certain higher limits under SECURE 2.0 remain in place for some plan types.
Americans fear not having enough to retire
Despite these increases, many Americans remain unprepared for retirement. Vanguard reports only 40% feel on track to maintain their lifestyle post-retirement, while Goldman Sachs notes 42% of workers have no disposable income after essential expenses.
Relatively few workers maximize contributions despite higher limits. In 2024, only 14% contributed the maximum to 401(k) accounts, largely older, higher-income participants. These changes give more Americans a chance to save incrementally.
Taxpayers are advised to review the IRS Notice 2025-67 carefully to optimize contributions and plan tax-efficient retirement strategies for the coming year, especially in a bit to combat the fears of not having enough money to retire.
The final day for Americans to file their taxes will take place on Wednesday, April 15 whilst those wanting to do so early can begin prepping their taxes now, ahead of sending e-filed returns in January.